Santa Monica, CA -- Business associations would make hundreds of millions of dollars from selling insurance if S. 1955 (Enzi R-WY) is approved to dismantle state oversight of health insurance and eliminate hard-won HMO patients' rights, according to the Wall Street Journal.
The National Federation of Independent Businesses (NFIB), which turned in petitions in support of the bill yesterday, publicly admits it would sell insurance if the legislation overriding state protections is enacted. The bill could be voted on by the full Senate as early as next week.
As reported by the Wall Street Journal in 2003: "A trade association the size of NFIB, which has 600,000 member businesses, could expect new revenue of more than $100 million annually if it got into the insurance business."[i]
"NFIB is aggressively lobbying this plan because it stands to make millions by selling insurance to its members," said Carmen Balber of the Foundation for Taxpayer and Consumer Rights (FTCR). "Small businesses and their employees will pay the costs when the junk insurance policies allowed under this proposal exclude preventive care and major illnesses, charge more to anyone not young and in perfect health, and don't protect against financial disaster when they get sick."
Dana Christensen was insured through an association health plan and owed more than $450,000 when her husband died of bone cancer and the insurer paid less than 18% of their bills. The Christensens bought their insurance through the National Association for the Self-Employed (NASE) from Mega Life and Health.
The financial and familial ties between the insurer and the ostensibly independent association have been the basis of numerous lawsuits across the country, including a $1.7 million settlement to Christensen. The insurer's holding company, UICI, and the administrative services company that recommends insurers to NASE, were run by father and son, respectively, until the father's death in 2005. When consumers buy insurance from Mega they join NASE at the same time, through an agent who represents both the insurer and the association.
S. 1955 would allow any insurer or HMO to sell insurance with skeletal benefits, circumvent Patients' Bill of Rights laws passed in 41 states, and override state regulation of health insurers with weaker or non-existent federal standards. FTCR said that the Enzi bill would create a vacuum in the health insurance market by promising cheaper coverage that actually provides no benefit. The plans could be used to lure employers and individuals desperate for affordable coverage away from traditional health insurance.
41 state Attorneys General joined the opposition to the bill in a letter to the Senate this week. Read the letter.
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The Foundation for Taxpayer and Consumer Rights (FTCR) is a nationally recognized nonpartisan consumer advocacy organization. For more information, visit us on the web at: http://www.ConsumerWatchdog.org
[i] "Trade Group Poses Health Plan --- Members' Insurance Could Cost Less -- but Skirt States' Oversight," Tom Hamburger. Wall Street Journal, May 28, 2003.