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More Reasons to Worry About the Senate Bill

The Washington Post story most likely to drive conversation today is Lori Montgomery's front-pager, which examines the true cost of the Senate bill. But the one that should get the most attention, and generate the most concern, is David Hilzenrath's article about the bill's coverage provisions.

Hilzenrath's primary focus is the many years it would take to get the new system running, a subject familiar to those of you following the debate. But Hilzenrath also shines a light on some other, less publicized features that ought to worry reform advocates:

A close reading of the bill reveals other surprises, like the section titled "No lifetime or annual limits," which is intended to protect people from huge out-of-pocket expenses.

Where annual benefits are concerned, the Senate bill bans only "unreasonable" limits. What that means is not spelled out; a Senate aide said the Treasury Department would set the standard.

In addition, the bill says that certain health plans could continue to use annual and lifetime limits. As Timothy Stoltzfus Jost, a law professor at Washington and Lee University, interprets it, those potentially exempt from the ban include companies that self-insure, meaning they pay employee health benefits out of their own coffers, and businesses with more than 100 employees.

Further, the prohibition on lifetime and annual limits applies only to limits "on the dollar value of benefits."

In the past, health plans have gotten around restrictions measured in dollars. In 1996, Congress passed a law that said employers could not set lower dollar limits on mental health coverage than on medical and surgical coverage. Many employers responded by adopting tighter limits on the number of mental health outpatient visits or hospital days, according to testimony the Government Accountability Office gave in 2000. Congress finally closed that loophole in 2008.

Hilzenrath goes on to describe the dangers of giving states too much leeway over enforcement and implementation. Here, again, Hilzenrath draws on the work of Timothy Jost, the legal scholar who has been writing about this for a while.

Why did the architects of the Senate bill include all of these loopholes? Partly to appease employers, who don't want government telling them what kind of benefits to offer, but partly to keep the bill's cost down. Among other things, requiring all insurance policies to meet higher standards of financial protection would have raised the price of coverage, thereby requiring the federal government to spend more money on subsidies.

The House bill, by the way, is generally stronger in these areas. It gets the exchanges going a full year earlier. It sets higher standards for financial protection and would, eventually, apply those standards to all insurance policies. It also envisions stronger federal regulation.

Of course, the House bill also would require the federal government to spend (and raise) a little more money. But, as Hilzenrath's article suggests, it'd be money well-spent.