UnitedHealthcare, Aetna and Humana made big news this week by promising to keep some already implemented provisions of Obamacare, even if the U.S. Supreme Court overturns healthcare reform. The move to maintain preventive care, young-adult coverage on parents policies and other provisions of the Affordable Care Act was good PR for the insurers, making it seem like they were making concessions when really they aren't giving up very much at all. Republicans touted the pledged benefits as proof that reform isn't needed, as if the reason 16 percent of Americans are uninsured is because of lifetime maximum benefits and expensive vaccinations.
The big insurers did not promise to sell policies regardless of pre-existing conditions, or stick to minimum medical loss ratios, or (of course) subsidize premiums for low-income Americans. What they have agreed to is relatively minor and would do little to bring down the number of uninsured. In addition, there would be no enforcement mechanism to keep them to their word. Reinstating lifetime benefit maximums would be unpopular now, but what's to stop insurers from implementing them again in a year in response to shareholder demand if there is no law to keep them from doing so
The insurers have vowed to allow young adults to stay on parents' plans until age 26, something that 37 states already mandate, with variation on age and dependency status (National Conference of State Legislatures). Furthermore, the whole point of the individual mandate was to find a way to get these "young invincibles" to pay premiums despite the fact that they generally don't need or use healthcare services, as a way of counterbalancing older people who do. Insurers don't mind if these premiums are coming from responsible parents or ne'er-do-well Millennials. Anyway, parents may be paying more in premiums for their kids than the young adults would if they were to get their own individual policies, depending on plan designs.
Humana and UnitedHealth also said that that they would continue to ban rescission except for in cases of deliberate fraud, but this was the line before healthcare reform, when members were accused of fraud for not listing specific conditions or treatments, and some insurers implemented fraud investigations because members had come down with breast cancer or AIDS.
Providing free preventive care makes sense if it means paying for vaccinations, mammograms and annual checkups rather than surgery or treatment later on. And since the insurers would no longer have to take all comers if Obamacare is overturned, then the free preventive care could reveal conditions that would allow insurers to kick members off their policies.
The announcements should make clear that in any competitive landscape, businesses will not voluntarily make major concessions that will put them at a disadvantage to rivals, nor should they. Just as is the case with child labor laws and safety inspections, no company wants to be the first to implement potentially costly reforms unless they are sure their competitors will be forced do the same. Without the tent pole provisions of the individual mandate and disregarding pre-existing conditions (and realistically, there cannot be one without the other), private health insurers will not do very much to decrease the number of uninsured people in America.
WellPoint and Cigna are holding off making pronouncements until after the court ruling, and Blue Shield of California made a point of not making an announcement for fear of undermining the case for healthcare reform. But if anything, the announcements by United, Humana and Aetna make a great case for preserving the Affordable Care Act by showing how little the insurers are capable of offering without systemic reform.