Obamacare Rent Seeking: Acupuncturists, Chiropractors, Plastic Surgeons, and Others Lobbying to be Defined “Essential”

08/25/2011 - 10:22am

With the passage of Obamacare, health insurance plans offered in the new Health Insurance Exchanges will have to provide certain “Essential Health Benefits” to beneficiaries. But the term “Essential Health Benefits” is anything but certain. Like many terms in Obamacare, Congress left the term “Essential Health Benefits” to be determined by the Department of Health and Human Services (HHS).

The statute requires HHS to define “Essential Health Benefits.” HHS has commissioned the Institute of Medicine (IOM) at the National Academy of Science to recommend “the criteria and methods for determining and updating the essential health benefits package.” The IOM, as part of their determination process has invited comments from the public.

We obtained copies of all comments submitted to IOM online, and will receive additional documents at a later date.

As we expected, special interests are lobbying to make sure their niche is included in the final definition.

Nearly 50% (46.6%) of comments were on chiropractic care. There were also a large number of responses from the orthotic and prosthetic medical community. Other commenters of note include:

  • Association American Acupuncture and Oriental Medicine

  • TeleTriage Systems

  • National Center for Transgender Equality

  • American Society of Plastic Surgeons

These providers are trying to improve their bottom line—not by improving the quality or efficiency of their work—but by lobbying the government to force insurers to pay for their services.

This is called rent seeking. “Rent seeking” occurs when businesses seek profits by lobbying the government for favorable laws instead of adding value to their product.

We make no judgment whether acupuncture or plastic surgery or any other medical service should be deemed an Essential Health Benefit. Whether or not HHS decides to consider plastic surgery “essential” is not the point. The point is that Obamacare has given HHS the power to choose winners and losers and, thus, has given health providers the incentive to use rent seeking behavior.

A zip file of the comments we obtained from IOM can be downloaded at http://dl.dropbox.com/u/22596519/EHBCommentsToIOM.zip