Congress: 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.
I am not reading the bill (1000+ page .pdf, or 4 page summary) the same way. The relevant section on page 16 describes the treatment of currently operating plans that will be grandfathered under the new legislation (Key hint - the section is titled "Grandfathered Health Insurnce Coverage Defined). Rather than tear up all existing health insurance contracts, such grandfathered plans will generally be allowed to operate with their current customers until death (or other circumstances) do them part.
However, all new qualified privately offered plans must meet certain guidelines to which a grandfathered plan will not be subject; for example, a new private plan may not exclude applicants on the basis of pre-existing conditions,although a grandfathered plan may be doing just that.
Hence, the impact of the provision cited by IDB will not be to make all private insurance illegal; it will be to make sure that all newly offered private insurance complies with the new guidelines. It may be the case that the new guidelines are so onerous that private plans can not see their way to a rational business strategy, but that is a different point than the one being made by IDB.
Let's belabor the issue of the grandfathered plans for a moment. Imagine an existing plan that is keeping premiums low by ruthlessly excluding smokers, the overweight, and people with pre-existing conditions. People currently in that plan should enjoy a low-cost alternative for years. However, although it might be an appealing alternative to slim, healthy fitness buffs, that plan will be closed to new entrants. Why? Because it does not comply with the new guidelines, and if it is allowed to stay in business by enrolling new members it will avoid compliance forever.
So what of the IDB claim that "those who leave a company to work for themselves [will not] be free to buy individual plans from private carriers"? Well, that is only a bit true - people won't be allowed as new entrants into grandfathered plans, but they will be free to enter any private plan that complies with the new guidelines.
The second IDB claim - "Those who currently have private individual coverage won't be able to change it" - is not strictly accurate but probably true. There is an excellent chance that some grandfathered plans will be very financially attractive to those already enrolled in them, so some "plan-lock" may occur. But for those intent on switching private alternatives that comply with the new guidelines ought to be available (although the price may not be desirable since, for example, pre-existing conditions are *not* excluded).
In both cases, the public option really is just one more option, not a legislated inevitability.
I think the IDB misfired here, but they still have 1,000 pages to go.
ASKED AND ANSWERED: Say Rule One with me - always check the InstaPundit.