UPDATE: Proposed excise tax on insurance looking like a very bad idea too.

One key goal of “health insurance reform” was to prohibit insurance companies from limiting how many dollars they would spend on a patient’s care during a year. This makes sense if you want to eliminate medical bankruptcies, which are unknown in most of the developed world.

But the merged Senate health care bill gives insurance companies an out.

 Link:

As currently written, the Senate Democratic health care bill would permit insurance companies to place annual limits on the dollar value of medical care, as long as those limits are not “unreasonable.” The bill does not define what level of limits would be allowable, delegating that task to administration officials. […]

Officials of the American Cancer Society Cancer Action Network said they were taken by surprise when the earlier ban on annual coverage limits was undercut, adding that they have not been able to get a satisfactory explanation.

“We don’t know who put it in, or why it was put in,” said Stephen Finan, a policy expert with the cancer society’s advocacy affiliate.

Ezra Klein has supported most of the compromises made along the way, including ditching the public health insurance option, but even he thinks this is crazy:

The Senate Finance Committee barred annual caps altogether. The merged Senate bill only erases “unreasonable” annual caps. What’s “unreasonable?” Hard to say.

Hill sources explain that this was inserted because CBO said premiums would “go through the roof” if insurers couldn’t cap benefits. […]

This, however, obscures the choice that’s being made. The tradeoff here is slightly higher premiums for everyone versus total financial ruin for the people who absolutely need help the most. Politically, choosing “everyone” rather than “people with cancer” makes sense, because the first group has more votes than the second. But on a policy level, it’s nuts. Health-care insurance literally exists to protect us from the worst-case scenarios. This provision says that the Senate bill will protect everyone but the truly worst-case scenarios. If you assume that people support the basic concept of health-care insurance, then they don’t, or shouldn’t, support this.

CNN reported,

When asked if the language goes against one of the fundamental promises Democrats made in health care reform, Sen. Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions Committee, said it was “one of the compromises we had to make.”

“We do have no lifetime caps, and we put in there no unreasonable annual caps,” he said.

After the loophole was reported on CNN Friday, the White House and key congressional staffers spoke to the Cancer Action Network and agreed to help close the loophole.

Still, Democrats said they had to make that compromise because telling insurance companies to get rid of annual caps on the amount of coverage would significantly raise the price of premiums for all Americans.

How do you think this huge “progressive victory” will go over if insurance companies are still forcing cancer patients into bankruptcy in 2012?

I wouldn’t take anything for granted regarding the insurance reforms in this bill. For all we know there are many more industry-protecting loopholes waiting to be discovered.

P.S.- That limited Medicare buy-in progressives “got” in exchange for cutting the public health insurance option from the Senate bill? It’s probably “going to be a non-starter.”