Legislative Bulletin: H.R. 758, Breast Cancer Patient Protection Act

Order of Business:  The bill is scheduled to be considered on Tuesday, September 23, 2008, under a motion to suspend the rules and pass the bill.

Summary:   H.R. 758 would amend the Employee Retirement Income Security Act (ERISA), the Public Health Service Act, and the Internal Revenue Code to require group and individual health plans to meet certain minimum coverage requirements with respect to breast cancer surgeries.  Specifically, the bill would:

  • Require plans to have coverage for inpatient and radiation therapy with respect to breast cancer treatment;
  • Require plans to cover 48-hour hospital stays in the case of mastectomy or lumpectomy procedures, and 24-hour hospital stays in the case of lymph node dissections to treat breast cancer;
  • Prohibit plans from requiring pre-authorization for hospital stays within the time limits prescribed above;
  • Require plans to cover secondary consultations with specialists regarding the diagnosis and treatment of cancer, including cases with a negative initial diagnosis.  If no specialist is available within the plan’s network, the plan would be required to pay for out-of-network coverage, with any co-payments or co-insurance charged to the beneficiary limited to in-network levels. (NOTE: This mandate would apply to all cancer diagnoses, not just those related to breast cancer, as the bill’s title implies); and
  • Prohibit plans from offering financial inducements to providers or patients in an attempt to subvert the federal mandates imposed above.

In addition, H.R. 758 contains language regarding the rescission of insurance plans purchased in the individual market.  The bill would amend the Public Health Service Act to prohibit plans from rescinding policies except in the case of “intentional concealment of material facts regarding a health condition related to the condition for which coverage is being claimed.”  The bill also provides for a process of independent external review prior to the rescission or discontinuation of the insurance plan.

Additional Background:  Since the 1960s, state legislatures have considered—and adopted—legislation requiring health insurance products sold within the state to cover various products and services.  These benefit mandates are frequently adopted at the behest of disease groups advocating for coverage of particular treatments (e.g. mammograms) or physician groups concerned that patients have access to specialists’ services (e.g. optometrists).

A recent survey by the Council for Affordable Health Insurance found that as of 2007, states had enacted a total of 1,961 mandates for benefits and services—an increase of 60 (more than one per state) when compared to the 2006 total.[1]  The number of state mandates varies from a low of 15 in Idaho to a high of 64 in Minnesota.  However, because employer-sponsored health insurance is pre-empted from state-based laws and regulations under the Employee Retirement Income Security Act of 1974 (ERISA), benefit mandates do not apply to employers who self-fund their health insurance plans—one reason why H.R. 758 seeks to impose those mandates on group plans (as well as state-regulated individual plans) on the federal level.

The cost and impact of benefit mandates on health insurance premiums have been the subject of several studies in recent years.  For instance, the Heritage Foundation prepared an analysis suggesting that each individual benefit mandate could raise the cost of health insurance premiums by $0.75 monthly.[2]  Although the cost of a single mandate appears small, the aggregate impact—particularly given the recent growth of benefit mandates nationwide—can be significant: For instance, Massachusetts’ 43 benefit mandates would raise the cost of health insurance by more than $30 monthly under the Heritage analysis.

Although well-intentioned, some conservatives may view the groups who advocate for benefit mandates as operating from fundamentally flawed logic: that individuals should go without health insurance entirely rather than purchase coverage lacking the “consumer protection” of dozens of mandates.  In addition, some conservatives note that the prospect of increasing the number of uninsured due to rising premium costs resulting from benefit mandates may precipitate a “crisis” surrounding the uninsured, increasing calls for a government-run health system.  In short, many conservatives may believe individuals should have the “consumer protection” to purchase the insurance plan they desire—rather than the “protection” from being a consumer by a government which seeks to define their options, and raise the cost of health insurance in the process.

Committee Action:  H.R. 758 was introduced on January 31, 2007, and referred to the Committees on Energy and Commerce, Ways and Means, and Education and Labor.  On September 17, 2008, the Committee on Energy and Commerce ordered the bill, as amended, reported by voice vote.

Cost to Taxpayers:  A CBO score for H.R. 758 was unavailable at press time.  However, the Congressional Budget Office has previously scored a mental health parity benefit mandate as costing nearly $4 billion over ten years.

Conservative Concerns:  Some conservatives may have concerns with H.R. 758, including but not limited to:

  • Increase Health Insurance Costs and Number of Uninsured.  As noted above, benefit mandates generally have the effect of increasing the cost of health insurance.  Moreover, some estimates suggest that every 1% increase in premium costs has a corresponding increase in the number of uninsured by approximately 200,000-300,000 individuals nationwide.[3]  Therefore, some conservatives may be concerned that H.R. 758 will actually increase the number of uninsured Americans.
  • Unfunded Private-Sector Mandates on Small and Large Businesses.  As detailed above, the bill contains multiple new federal mandates on the private sector, affecting the design and structure of health insurance plans.  Among other mandates, the bill would require plans to cover out-of-network specialist consultations for all types of cancer, even if the initial consultation resulted in a negative diagnosis.
  • Undermines Federalism; Democrat Hypocrisy.  In addition to imposing mandates on group health insurance plans generally regulated at the federal level under ERISA, H.R. 758 would also impose these same mandates on individual health insurance plans, which under the McCarran-Ferguson Act are regulated at the state level.  Some conservatives may be concerned by this attempt to undermine state authority and micro-manage health insurance plans.  In addition, some conservatives may note that Democrats who previously cited “state consumer protections” as one reason to oppose efforts to purchase health insurance across state lines now apparently find even these “protections” insufficient, and wish to impose additional layers of federal regulation on individual insurance plans.

Does the Bill Expand the Size and Scope of the Federal Government?  Yes, the bill would create new federal insurance mandates related to cancer coverage and treatment.

Does the Bill Contain Any New State-Government, Local-Government, or Private-Sector Mandates?  Yes, the bill would require employers to comply with several new federal mandates related to cancer coverage and treatment.

Does the Bill Comply with House Rules Regarding Earmarks/Limited Tax Benefits/Limited Tariff Benefits?:  A Committee report citing compliance with Clause 9 of Rule XXI regarding earmarks was unavailable.

Constitutional Authority:  A Committee report citing constitutional authority was unavailable.

 

[1] Council for Affordable Health Insurance, “Health Insurance Mandates in the States 2008” and “Health Insurance Mandates in the States 2007,” available online at http://www.cahi.org/cahi_contents/resources/pdf/HealthInsuranceMandates2008.pdf and http://www.cahi.org/cahi_contents/resources/pdf/MandatesInTheStates2007.pdf, respectively (accessed July 19, 2008).

[2] Michael New, “The Effect of State Regulations on Health Insurance Premiums: A Revised Analysis,” (Washington, Heritage Center for Data Analysis Paper CDA06-04, July 25, 2006), available online at http://www.heritage.org/Research/HealthCare/upload/CDA_06-04.pdf (accessed July 19, 2008), p. 5.

[3] See, for instance, Todd Gilmer and Richard Kronick, “It’s the Premiums, Stupid: Projections of the Uninsured through 2013,” Health Affairs Web Exclusive April 5, 2008, available online at http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.143/DC1 (accessed July 19, 2008), and Government Accountability Office, Impact of Premium Increases on Number of Covered Individuals is Uncertain (Washington, Report GAO/HEHS-98-203R, June 11, 1999), available online at http://archive.gao.gov/paprpdf2/160930.pdf (accessed July 19, 2008), pp. 3-4.