California Attorney General Bill Lockyer strongly opposed federal legislation that will eliminate state health insurance consumer protection rules in a letter released yesterday, warning the bill "will result in many being priced out of the health insurance market."
"The mere fact that insurers would prefer a nationwide marketplace on their terms is not a legitimate reason to change our constitutionally-created federal system which leaves to the states the police power to regulate those activities that affect the daily lives of their citizens," wrote Attorney General Lockyer.
S. 1955 (Enzi, WY) encourages any health insurer or HMO to sell bare bones health plans that will cost consumers more for less health care. The bill does not cap the amount patients must pay out of pocket for care and allows insurers to ignore state laws, including Patients' Bill of Rights laws passed in California and 40 other states.
"By causing consumers to lose the rights they currently have under state laws, S. 1955 seems to be moving toward federal preemption of market standards and policy approval. These have always been within the purview of the states, and Congress should not change a system that has worked very well for over a century."
State protections at risk include those requiring health insurance plans to provide cervical and prostate cancer screenings, banning "drive-thru" deliveries, and guaranteeing an independent review if an insurer denies coverage for medically necessary care.
"Allowing the states to set their own mandated benefits not only allows the states to deal with issues and health concerns of particular importance to their citizens, it also sets a level of care standard that every policy offer must meet," Attorney General Lockyer continued.
The California Attorney General warned that state taxpayers will be left paying the bills for treatment that insurance companies are not required to cover under S. 1955's junk health plans: "As plans drop their maternity or other benefits, and as employees are priced out of coverage, the various Medicaid programs, and other health care programs in the states will become even more overburdened than they already are."
Dana Christensen, a California widow who was insured with one of the junk health plans promoted under S. 1955, traveled to Washington D.C. to oppose the legislation in the Senate. Dana was left with over $450,000 in medical bills when her husband Doug passed away of bone cancer. The health plan covered less than 20% of Doug's costs, even though the couple had paid for a special chemotherapy rider.
Though similar legislation has been proposed in past sessions and passed by the House of Representatives, the bill was approved for the first time in the Senate Committee on Health Education Labor and Pensions this month. Dana was not allowed to testify during the committee hearing.
The Christensens' story can be found in an online resource published by the nonprofit Foundation for Taxpayer and Consumer Rights outlining the skeletal benefits of these junk health plans.