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Private Health Insurance Illegal? – Sec. 102: Sub. a 08/05/2009

Posted by Leona Dawnfire in Government, Health Care.
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I began reading the Health Care bill recently. I have yet to get very far – these bills are not written in anything close to plain English – and I’m already frightened and angry about what I’m reading.

The first major issue that I have come across is very early on in the bill (page 16). It states that any private insurer (any insurer besides the government) is not allowed to insure anyone new starting on the date that the bill goes into affect.

This means that private insurance is illegal and will be forced out of business. Thus, everyone will have to choose the government plan, which will send us into a health care system worse than Canada’s.

This bill must not be passed!

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1. coldwarning - 08/15/2009

Just to set things straight. Here is a Washington Post article that gives information on the bill and that it “Does Not” make private insurance illegal.

Washington Post Article : http://voices.washingtonpost.com/ezra-klein/2009/07/page_16_of_the_house_health_ca.html

Page 16 of the House Health-Care Bill Does Not Make Insurance Illegal

There’s been a weird talking point bubbling up that the House health-care plan makes private insurance — sigh — illegal. Rep. Michelle Bachmann, who breathes out crazy like the rest of us exhale carbon dioxide, warns that “on the 16th page, it says whatever health care you have now, it’s going to be gone within five years.” Investor’s Business Daily says, “right there on Page 16 is a provision making individual private medical insurance illegal.”

Sigh. Not really. Shadowfax does the lord’s work and explains what’s actually going on here. The short version is that your insurance doesn’t become illegal. It just has to offer itself through the Exchange and follow the new rules, like not jacking up your prices because you had strep throat last year. As for the 93 percent of us who don’t purchase coverage on the non-group market? Our insurers are unchanged. Scary, huh?

By Ezra Klein | July 23, 2009; 9:03 AM ET

Leona Dawnfire - 08/15/2009

First off, here is the section of the bill that this is all about:

(1) LIMITATION ON NEW ENROLLMENT.—
(A) IN GENERAL.—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 Y1.

So, after the bill goes into effect, “individual health insurance issuers,” meaning private insurance companies, can no longer enroll any individual in such coverage after the date that this bill goes into effect. True, this does not mean that as soon as the bill is passed all private health insurers will go bankrupt or be shut down. However, this does mean that anyone who does not already have a health insurance plan with such insurers cannot get one – they will only be able to obtain the government option.

Also, because the government option is going to be cheaper and the bill requires businesses to provide health insurance for its employees, most (if not all) companies will switch to the government option. It’s just business.

In conclusion, the only way for one to be covered by health insurance other than the government option, one has to currently be self-employed and already have such insurance. This, of course, can only continue as long as the private insurers can afford it, which, once the majority of the population is on the government plan, won’t be for long. Then they go bankrupt and the last of the population will be on the government plan.

Also, there’s this provision:

(2) LIMITATION ON CHANGES IN TERMS OR
CONDITIONS.—Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

Thus, the private insurers can’t follow new rules or make changes to their plans (except, perhaps, with the government’s permission or order – which seems quite unfair, seeing as they would be a competitor in the field).

Thank you very much for your comment and for the link to the article – however, I urge you to read the bill for yourself.

2. coldwarning - 08/15/2009

From what I have been through first hand with private health insurance I really could care less if they have to jump through hoops to stay viable. Making a profit bigger by picking and choosing who and what they are going to cover is not right and should be illegal. I would be happy if they threw the bill out and wrote a new one that simply regulated the private insurers so they couldn’t take advantage of sick people who pay into their plans each month.

Leona Dawnfire - 08/15/2009

I’m not against health care/insurance reform at all! I just think that the Health Care Bill currently being considered by Congress is a huge mistake. There are far too many problems and consequences that go along with it as it is written now.

Making it so private insurers couldn’t take advantage or discriminate would be wonderful – this bill just isn’t the way to do it.

3. coldwarning - 08/16/2009

Its cool to discuss this with someone who isn’t throwing idiotic banter around based on propaganda. I just hope if the bill fails that something else can be worked out and include some kind of watchdog over health insurers. I know regulation is a bad word with a lot of conservatives but I just think ethically when it comes to health care that we need it. They shouldn’t have free reign in denying coverage or service to a paying customer. For the first time in a long time it is nice to see a civil argument on this issue. You have a good blog here.

Leona Dawnfire - 08/16/2009

I do agree that some form of regulation is probably necessary when it comes to health insurance. The system is far from perfect. However, I am hesitant of giving that power to the federal government. But unfortunately, whoever you give that power to would likely find a way to abuse it. Thus is the way of humans.

Thank you very much! I’m glad you like the blog. 🙂

Hotonis - 08/22/2009

I definitely agree that something has to be done, but I as an American citizen have the right to research things like this bill for myself. I do not like this reform bill period. I do however think that there must be investigation done on what health insurance companies are doing, because the current system is broken. Something has to be done. The way to do that, is to take time to figure out the best way to keep insurance agencies from cheating people from the coverage for which they payed, and to make insurance easier to obtain such as making it less difficult to have insurance without an employer middle man.

4. Vicki - 08/24/2009

Hello.
I agree that something MUST be done..but not HR 3200! I believe capitalism works.. but when we’re talking about the health/lives of people, profit should NEVER be a consideration!

When considering health insurance, I think it should be mandatory for health lines to be strictly non-profit. They still have the home, auto, commercial, etc..lines..in which to make their profits. But let’s get rid of the conflict of interest with health

A good working example would be the one in Colorado (I think it’s called the Rocky Mountain health plan, or something like that…) and I’m sure even that can be greatly improved upon.

‘that’s just my opinion…

5. Health Care Bill Passes the House « A Rising Dawn - 11/08/2009

[…] the way, the grandfathered health insurance section I mentioned in this post a while back? Well, it’s back, now on page 91. You will not be able to get private health […]


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