“Fishy” Rumors About New York Health Insurance

So, I took the opportunity to inform the White House of a couple of “fishy” statements made by President Barack Obama in a speech to a New Hampshire rally, in which he claimed that the U.S. government will force health insurers to cover preventive screenings for breast and prostate cancer — which they already do. And he’s going to prevent insurers from dropping you after you’ve become sick — which has been illegal under federal law since 1997, and also under state laws.

Furthermore, despite the president’s claim that “no one holds these companies accountable for these practices”,that’s what state insurance commissioners do: Enforce good-faith execution of insurance contracts. One would think that the president would know this, what with his Secretary of Health & Human Services having been the Kansas Insurance Commissioner.

So, I thought I’d let the White House know that the President was investing a lot of political capital in an effort to bring about things that already exist. But there are some new rules that the president does want to impose nationwide: guaranteed issue, community rating, and forbidding exclusion of pre-existing conditions from health insurance. So, I’ve just let them know about a very fishy interview that MSNBC’s Contessa Brewer conducted with an unemployed ad executive.

Mr. Bentley, the advertising executive, lost his job in San Francisco and went to New York two years ago to strike out on his own. He bought COBRA continuation coverage until he could no longer afford it. That’s when Ms. Brewer made her first error, asserting that COBRA is expensive because the employer is no longer picking up most of the cost. Not true: employees pay all the costs of their health coverage, either directly or through foregone wages. The real reason COBRA is expensive is adverse selection: If you lose your job, your employer has up 30 days to tell the plan administrator, which has 14 days to mail an election notice to the individual, who has 60 days to elect coverage, and another 45 days to pay the first premium. That’s up to 149 days for you to opt for coverage! No wonder only the sickest employees chose it, incurring costs that are 145% of those incurred by the remaining employees.

But then the story got really fishy. Mr. Bentley noted that after he lost COBRA, he couldn’t buy a policy in the individual market because someone in his family has pre-existing conditions, and said that it was crazy for insurers to be able to exclude coverage. Whether it’s “crazy” or not, it’s already illegal under federal and New York law. If he had COBRA coverage he has 63 days to buy individual coverage and the insurer cannot exclude any pre-existing condition. If he’s had a lapse of 63 days, the insurer can exclude coverage for up to 12 months, but only for a condition for which he received medical advice or treatment within six months before applying for the new coverage. (This information is readily accessible in the New York Consumer Guide to Health Insurers, available online. I found it within about two minutes of searching, which I guess is too much effort for MSNBC’s “research” staff.) Even worse, New York is one of the few states that already impose guaranteed issue and community rating in all segments of the health-insurance market, which has destroyed the individual market in the Empire State.

The president has re-branded his health “reform” as “fixing” health insurance, but his “fixes” either already exist or have been proven harmful in states that have adopted them. One can only conclude that his massive effort to pass legislation is not designed to “fix” health insurance, but impose the federal government’s control over Americans’ access to medical services.

This post originally appeared on StateHouseCall.org.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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