Two reasons that many people went along with the Obama administration’s health care reform proposal was that it was purported to extend coverage to the uninsured and would eliminate the ability of insurers to deny coverage (including rescind existing policies) for pre-existing conditions.
The latter claim was false (more on that shortly) and some gaps have already come to light. Consider this story from the New York Times, “Coverage Now for Sick Children? Check Fine Print.” Here was the sales talk:
Mr. Obama, speaking at a health care rally in northern Virginia on March 19, said, “Starting this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions.”
Here’s the reality:
William G. Schiffbauer, a lawyer whose clients include employers and insurance companies, said: “The fine print differs from the larger political message. If a company sells insurance, it will have to cover pre-existing conditions for children covered by the policy. But it does not have to sell to somebody with a pre-existing condition. And the insurer could increase premiums to cover the additional cost.” …
But, insurers say, until 2014, the law does not require them to write insurance at all for the child or the family. In the language of insurance, the law does not include a “guaranteed issue” requirement before then…
Starting in January 2014, health plans will be required to accept everyone who applies for coverage.
Yves here. So that means everything is hunky dory starting in 2014, right? Don’t assume that.
The way pre-existing conditions often come into play now is that a patient has an expensive ailment, and the insurer looks for a way to deny coverage. So they go through the patient’s medical history and find something, anything they failed to tell the insurer about, and use that as an excuse to deny coverage. And it doesn’t matter that the condition you failed to report was inconsequential, or that you failed to report it because your doctor diagnosed it late (for instance, you got Lyme disease before you got a policy, but no one diagnosed it until it was advanced Lyme disease, after you were covered).
Why can insurers use these weak excuses to cancel coverage? Because they have been able to argue successfully, that these omissions are “fraud and intentional mispresentation”.
Guess what? The draft bill preserved the “fraud and misrepresentation” out, and I have seen nothing to indicate that this language was revised. The executive director of a 150,000 member nursing organization, which opposed the bill, noted:
Insurers may continue to rescind policies for “fraud or intentional misrepresentation” – the main pretext insurance companies now use to cancel coverage.
So when will voters find out the full extent of the bait and switch? In 2014, when Obama hopes to have been voted in for his second term.
Update 3/30/10: Per reader Nimrod, it looks as if the hue and cry over the poor drafting of the language regarding child coverage has led to a climbdown by the industry. No openly crossing Obama during his momentary resurgence. But I am not holding my breath that other ambiguities in the bill will be so readily resolved in the public’s favor.