FactCheck is one of my favorite all-time ‘helpers’. They do a lot of the digging and checking so we can know what’s right and what’s BS. And most of the time they get it right.
Yesterday they didn’t.
FC took Obama to task for an ad that, according to Igor from Think Progress; “improperly conflated banking deregulation with McCain’s plan to allow health insurers to sell plans across state lines.” Igor claims that deregulating one is same/same as deregulating the other; McCain has been an ardent advocate of deregulation for years, and it is no big leap to think that he’ll do much to deregulate the health insurance business. As he’s already said, himself, repeatedly.
I’d go a bit further than Igor did.
In the McCain plan, what’s to stop a health plan from canceling coverage when they find out you have a bad case of the horribles? Answer – nothing, as long as the state where the insurer is licensed is OK with it. While McCain may say that won’t happen, who’s to say it won’t? States will fight to be the domicile of choice for health insurers, knowing that the lowest cost and lightest regulation makes for lots of fees (see Delaware for corporations…)
McCain says (in the Contingencies article) that he wants to do something (exactly what is undefined) to protect Americans with pre-existing conditions. This desire to ‘protect’ Americans with pre-ex will require the government to either force insurers to cover them (hmmmm, is that a ‘regulation’?) or use high risk pools, a notoriously under-funded and inadequately managed method that has never worked well.
I emailed FactCheck on their smackdown of Obama, protesting what I consider to be a very narrow view of the logic behind the ‘offending’ ad. Haven’t heard back yet…
Sep
23
you are aware we have federal regualtion as well right?
ERISA
COBRA
HIPAA
“what’s to stop a health plan from canceling coverage when they find out you have a bad case of the horribles?”
A couple inches of federal law, law that has far greater consiquences when broken then state law.
Nate – thanks for the comment, and yes, I am aware that there are Federal regulations and laws that apply to health coverage. My understanding of the laws/regulations you list appears to be different from yours. Note that my response below is specific to the original post and the excerpt from that post.
Re ERISA – only applies to self insured employer plans – by definition individual health plans are not subject to ERISA.
COBRA – applies to extending benefits when employees leave their jobs. Again, this does not apply to individual plans.
HIPAA – also applies to employer plans. (from insure.com) HIPAA’s rules apply to every employer group health plan that has at least two participants who are current employees, including companies that are self-insured. States have the option of applying the rules to “groups” of one, which some have opted to do. That helps the self-employed. Some states also have enacted their own laws protecting health insurance applicants, and in many cases the states afford more rights than federal law.
There is one major exception to HIPAA: It provides no protection if you switch from one individual health plan to another individual plan.
Net is there are no federal laws or regulations that prevent individual health plan insurers from canceling coverage as described in the post.
Paduda
Mr. Paduda is correct; individual plans are purely regulated by the State. Federal Regulations do NOT apply. McCains plan would undermine current and future State Regulations. It would also undermine the States right to protect their citizens from fraud and abuse. Oh, you’ve been defrauded, you need talk to Idaho; but I live here in New York! I can see it now, if somehow McCain’s plan comes to light, States will start passing laws baring it’s citizens from buying insurance from other States…..