Brain-Jockey

When I’m Wrong, I’m Right:The Truth About Private Health Insurance and Reforms

Written by Audrie Zettick on August 3, 2009

I chastise my college students for not checking the facts when they cite online articles.  It’s too easy in today’s quick-paced world to promote bad information.  I have them consider the source.

 

For my recent piece on Health Care Reform, I cited some information provided through Investors Business Daily, a reputable source for finance information.  I did a quick double check of their info, but it wasn’t thorough enough–so I’m in for some self-chastising.

 

What IBD stated was that provisions on Section 102, page 16 of HR 3200 would make it illegal to provide new individual private insurance.  After looking at that portion of the proposed bill, I used their information as part of a larger article on various provisions that would make us pine for the days when we had choice of private insurers. 

 

The Facts Mam, Nothin’ But The Facts

 

Turns out, a deeper look at that section of so-called “America’s Affordable Health Choices Act of 2009″ shows IBD was wrong.  Existing private health care plans won’t be “illegal” but would be “grandfathered” and allowed to continue.  They have up to 5 years to get in line with government-mandated standards on what health care benefits are covered.  However, they can’t enroll new members until they bring their coverage in line.   

 

So my statement that “private medical insurers are not allowed to enroll ANY new customers as of the first day that the government plan begins” actually should read “ private medical insurers who are not offering all the benefits mandated by the feds are not allowed to enroll ANY new customers as of the first day that the government plan begins.”

 

But here’s the full picture: H.R. 3200 limits employers’ options to provide a package of benefits that is affordable.  It will mandate what has to be covered.  When the government mandates that all policies have certain benefits the only thing that is certain is that the cost of providing insurance will rise.  HR 3200 and the bill put forward in the Senate both penalize employers who don’t offer health insurance–either 8% of payroll or $750 respectively. 

 

You don’ t have to be a CPA to figure out that businesses will do what is best for their bottom line.  Although employees are an important asset, business will look to invest their money where they get the biggest bang for the buck–product improvements, technology, etc.  Health benefits probably aren’t high on the list.  Even the most well-meaning companies will quickly figure out that paying penalties is less expensive than offering health insurance.  Employees will be forced to take the only other available option–the government plan.

 

So I’m still right: “Come 2020, we may be wishing we still had access to private health insurance plans, some choice in what those plans were and less government on our backs.”