Obama Health-Insurance Decision Passes Political ‘Hot Potato’ to States

by
December 19, 2011

By Alex Wayne – Bloomberg News

The Obama administration avoided a potentially brutal lobbying battle over the medical benefits insurers must cover under the U.S. health- care overhaul when it decided last week to hand the decision off to states.

The Dec. 16 ruling, coming less than a year before the presidential elections, gives states the power to set coverage levels for the policies uninsured people will buy through regulated marketplaces, called exchanges, starting in 2014. Business groups will argue for a narrow set of benefits to save costs while consumer advocates push for expanded coverage.

The decision shifts the debate to statehouses and away from the White House, and lets President Barack Obama say he’s giving governors and legislatures more flexibility within their own communities to confront rising medical costs and control changes the 2010 health-care law is bringing to insurance markets.

“Obama has taken all the grief he can stand over health care,” said Erik Gordon, a business professor at the University of Michigan in Ann Arbor, in an e-mail “He doesn’t want it to give the Republicans any more political ammunition. He is passing the hot potato to the states.”

About 24 million people are projected to buy coverage through exchanges by 2019, according to the Congressional Budget Office. Premiums will average $5,800 for individuals and $15,200 for families in 2016.

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Under the new guidelines, state lawmakers must either set coverage levels in line with widely subscribed small- business plans in their communities, or peg them to benefits included in their state employees’ health plan, federal employee plans or the largest commercial managed- care plan in the state.

Generally, health plans for small businesses, state employees and federal workers “cover similar services,” including doctors’ visits, hospitalization and outpatient mental health, according to a study conducted by the U.S. Health and Human Services Department ahead of the Dec. 16 announcement.

To read more, visit: http://www.bloomberg.com/news/2011-12-19/obama-health-insurance-decision-passes-political-hot-potato-to-states.html

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