Tuesday, July 21, 2009

The end of private health insurance?

I generally don't mix politics with medicine, but I ask you to consider this article from Investor's Business Daily published July 15, 2009:

It didn't take long to run into an "uh-oh" moment when reading the House's "health care for all Americans" bill. Right there on Page 16 is a provision making individual private medical insurance illegal.

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

From the beginning, opponents of the public option plan have warned that if the government gets into the business of offering subsidized health insurance coverage, the private insurance market will wither. Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington's coverage.

The nonpartisan Lewin Group estimated in April that 120 million or more Americans could lose their group coverage at work and end up in such a program. That would leave private carriers with 50 million or fewer customers. This could cause the market to, as Lewin Vice President John Sheils put it, "fizzle out altogether."

What wasn't known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law.The legislation is also likely to finish off health savings accounts.

Washington does not have the constitutional or moral authority to outlaw private markets in which parties voluntarily participate. It shouldn't be killing business opportunities, or limiting choices, or legislating major changes in Americans' lives.

A blogger from Maine, participating in a conference call with the President, said he kept running into the above article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.”


Michael Ditto said...

Except that their analysis is false.

"In fact, the provision to which the editorial referred establishes the conditions under which existing private plans would be exempted from the requirement that they participate in the Health Insurance Exchange. Individual health insurance plans that do not meet the "grandfather" conditions would still be available for purchase, but only through the Exchange and subject to those regulations."

femail doc said...

Thanks for chiming in on this spirited debate Michael. Reading the test of H.R. 3200 is enough to make one weak in the knees whilst trying to interpret the intent of this law.

Seems to me, if not literally making private health plans 'illegal', this Health Insurance Exchange business is as good as insofar as it makes it virtually impossible for health plans to be competitive with the government plan. I think this commentary from healthcarelawreform.com says it all:

For health insurers and other managed care organizations, a significant question is the extent to which the conditions of participation in the Exchanges—including mandatory acceptance of all enrollees and participation in the risk-pooling mechanism established for the Exchanges—affect the ability to offer the essential benefits (and any permissible additional benefits) at an affordable rate.

As the years go by and grandfathered plans go out of existence, how on earth will private plans to continue to compete with the public plan? Obviously, they can't. Thus, our choices become limited to the public plan as effectively as if these private plans were 'outlawed'.

Ruth said...

The resistance to public health care in the USA boggles my mind!

I have private health coverage for items not covered by the government (drugs, dental, medical equipment, rehabilitation services outside of hospital,etc) Thank goodness I never have to worry about basic hospitalization, lab/medical imaging fees and physician's fees.

Ruth, Canada

Cilicious said...

I guess Obama just has too much frickin' audacity. ;) I don't know how he'd pay for what he proposes.
But what will the alternative be?
Should we just keep doing without healthcare?
Right now, my private health insurance will not cover orthotics, let alone foot surgery. I've put off a multitude of stuff--but at least I have some semblance of healthcare.
I know people young and old who have no health insurance whatsover.

Anonymous said...

It has become political when 'they' interpret this plan to mean it would 'outlaw' private insurance..... what bunk....
Private insurance would have to get its proverbial stuff together and actually offer something of substance to the consumer for the first time since the 1970's......and ditto for the doctors who live in their delusional ivory towers of power , stroking each others egos, offering little in the way of healing... for how many years now???????????

I say ...bring it on Obama!!!

Anonymous said...

I have to admit I haven't read the bill, nor could I bear to. That said, I know 3 US physicians who have moved to Canada and are happy with their jobs and happy with the health care their families are getting. One was an interventional radiologist and was so stressed he was on the verge of quitting medicine; he now practices in Toronto and has a normal schedule and a family life. I think it will be really hard and a slow adjustment in the US to transition to something other than what we have. But the number of people here who have no insurance or are on the razor's edge of keeping what they have is untenable. I'm in favor of a slow transition to a single payer system. In many ways the new PCP grads coming out of residency are setting the stage for this since so many go to work for salaries at big groups like Kaiser, Group Health, etc., or become hospitalists in order to make a living and have a life. We gotta start somewhere. . .

Cilicious said...

Has anyone read this Paul Krugman article? It certainly made me stop and think a bit.

dorsey said...

United health care made more than 2 Billion in profit last year; the companies have enough money and clout to make sure they don't become illegal, honest. Frankly, if competition from the government inspires them to pay a hundredth the attention to their clients as they do to themselves, I think it would be a good thing (as one who's been rejected for catastrophic insurance because I failed to disclose I "have a lymph node." honest to god.) Thanks for the post, thinking about it gave me the energy to walk briskly for my entire evening walk. And how did Michael D make bold letters? I wanted that for 2 billion profit.