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Does the House Plan Outlaw Private Insurance?

Posted By Conn Carroll On July 16, 2009 @ 12:06 pm In Obamacare | Comments Disabled

Investor’s Business Daily writes [1]:

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.

Instapundit reader Patrick Ying then responds [2]:

Investor’s Business Daily did not continue to read the bill to page 19. “Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan. ” It does not outlaw individual private coverage – you can still buy the plan on the Exchange where they will compete with the public option, not be replaced by it. The advantage of the Exchange, is that the coverage no longer has one of the problems of individual coverage – skyrocketing premiums should you become ill.

So who is right? IBD is closer to the truth. Ying is right in that the House plan will not outlaw all individual health insurance. But he neglects to see the importance of the phrase “Exchange-participating health benefits plan” in the passage he quotes above. In order to qualify as an “Exchange-participating health benefits plan,” all health insurance plans must confirm to a slew of new regulations, including community rating and guaranteed issue. These will all drive up the cost of health insurance. Furthermore, all these new regs would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage. Until, of course, it becomes too expensive and they just dump you into the government plan.

So IBD is wrong: individual health insurance will not be outlawed. But it will be effectively regulated out of existence… which is effectively the same thing.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/07/16/does-the-house-plan-outlaw-private-insurance/

URLs in this post:

[1] writes: http://www.ibdeditorials.com/IBDArticles.aspx?id=332548165656854

[2] responds: http://pajamasmedia.com/instapundit/81987/

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