Investors’ Business Daily Lied To You!

The Lie

Investor’s Business Daily’s latest salvo comes in the form of an editorial claiming that private insurance is eliminated.

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.

Unfortunately, IBD was just a little bit incorrect about the analysis and the reporting. I suppose, though, that characterizing it as an editorial might exempt them from actually reporting facts.

The Truth

Background: Page 16 defines what coverage will be considered “grandfathered coverage”; that is, coverage in existence today which would not be in compliance with new standards imposed by the law.

What it says: Any individual insurance policy (as opposed to a group insurance policy) that is in effect today will be permitted to remain in effect; however, any new policies issued after the law becomes effective will be required to comply with the standards set out in the section relating to policies offered via the new Health Insurance Exchange.

What it does: The purpose of the provision is to bring policy offerings into line with the minimum benefit tiers and provisions required under the new law. Here are those requirements:

Must offer “Basic Plan Benefits”, which means the following: No pre-existing condition exclusions, covers hospitalization, outpatient hospital and outpatient clinic services, physicians visits, supplies, equipment, prescription drugs, rehabilitative services, mental health and substance abuse treatment, preventive services, maternity, well baby and well child care, vision and dental for children under 21.
Has co-payments and deductibles not more than $10,000 per year, indexed for inflation.

On page 19, the bill clarifies the grandfather provision further by specifying that any individual health insurance coverage that is NOT grandfathered (e.g. products introduced after effective date of the law), will have to conform and be offered as an exchange-eligible plan.

This is all the grandfather provision does. Nothing more, nothing less. It allows existing products to die a natural death while requiring new products to conform to the basic standards. Those products are still offered by insurers. The public plan that has them all in an uproar is simply one among other offerings.

Why the lie? This provision effectively forces the insurers to sit down and craft policies that compete with each other and the public option in terms of benefits and accessibility. Recissions will be far more difficult and subject to three levels of review. Pre-existing conditions will be a dead term. All of this is great for individuals covered, but for insurers, it shuts down their gravy train. They’ll actually have to use one risk pool instead of tiered risk pools.

They don’t want to do that. They like making record profits while the rest of us are bankrupted. They understand that there will be reform; they just want it to be reform that benefits them instead of the rest of us. To that end, they recruit publications friendly to their cause like Investors’ Business Daily to publish ‘editorials’, which can then be spread via social networks and blogs to scare you into opposing ANY reform.

Now you have the facts. Straight out of the proposed legislation, from a person who has read the actual text of the legislation — all 1,018 pages of it — twice, and has a strong background in how these laws are shaped and come into being.

Do not let them scare you. Arm yourself with the facts.

The full text of the House Bill can be downloaded here. (PDF)