Does The Senate Bill Really Allow Insurers To Set ‘Reasonable’ Limits On Benefits?

Progressives are criticizing Majority Leader Harry Reid (D-NV) for including language in the merged Senate bill that would allow insurers “to place annual limits on the dollar value of medical care, as long as those limits are not “‘unreasonable’.” While it’s unclear how or why the language made its way into the final legislation, Reid’s explanation is not too convincing:

Hill sources explain that this was inserted because CBO said premiums would “go through the roof” if insurers couldn’t cap benefits. The official quote from Jim Manley, Harry Reid’s spokesperson, says much the same thing. “We are concerned that banning all annual limits, regardless of whether services are voluntary, could lead to higher premiums,” he explained. “We continue to work with experts on how best to accomplish our goals of preventing insurance companies from imposing arbitrary coverage limits while providing the premium relief American families need and deserve.”

This doesn’t make too much sense, particularly because the House bill managed to avoid use “unreasonable” language without causing premiums to soar. To be fair, the House limits unnecessary care by using “medical management” in another section of the bill. The Senate bill was likely trying to get at the same thing, but did so in the broadest terms possible. Compare:

The House bill deploys the far narrower “medical management” language on page 109. “Nothing in this Act shall be construed to prohibit a group health plan or health insurance issuer from using medical management practices so long as such management practices are based on valid medical evidence and are relevant to the patient whose medical treatment is under review.”

The Reid language goes beyond this narrow provision and should be changed. Encouraging plans to manage unneeded care is one thing, allowing them to establish so-called ‘reasonable’ limits is another.