"Junk Health Care" Bill Would Undercut Strong State Law that Requires Insurers to Take All Applicants
Santa Monica, CA -- The viability of Massachusetts' closely-watched attempt to insure nearly all of the state's residents depends on state requirements for health insurers to take all applicants, a consumer protection that would be eliminated by legislation the U.S. Senate is expected to take a final vote on next week. Massachusetts lawmakers may vote as early as today on whether to override Governor Romney's veto of employer responsibility and patient protection rules.
Massachusetts law requires insurance companies to offer insurance to all applicants (known as the "take all comers" rule), neither denying coverage nor pricing it entirely out of reach for those who are ill or at risk. S. 1955 (Enzi, R-Wyoming), would override these "community rating" laws and allow any health insurer or HMO to charge patients more because of their age, health or gender.
"This junk insurance bill is being peddled to the public as a way to cover more uninsured people, yet its chief effect would be to strip away state rate protections like Massachusetts', as well as Patients' Bills of Rights across the country," said Judy Dugan of the Foundation for Taxpayer and Consumer Rights (FTCR). "To pass such a bill during the Senate's Health Week even as Massachusetts struggles with how to enact its plan, is cynical and deceptive." Read more about the legislation.
The Massachusetts legislature may vote today on whether to restore a modest $298 a year charge on employers who fail to provide health insurance to employees. Gov. Mitt Romney had vetoed the provision, and it is not certain that the legislature will be able to override it. With no charge at all, many businesses are likely to cancel their group insurance and push their employees into the state's pool. Add that to a federal bypassing of the state's community rating law, and Massachusetts' plan would be doomed by rising costs and deteriorating coverage.
Massachusetts currently requires insurers to sell policies to every similarly-situated individual at the same price regardless of health status, past medical conditions, age or gender -- unlike the underwriting that exists in most markets. In most states, including California, insurers may charge more, raise rates or simply refuse coverage to the ill.
If the Enzi bill passes, a version of it is likely to become law because the House has already passed a similar measure and President Bush has promoted the plan. In order to sell the policies envisioned by the bill -- typically bare-bones plans with high deductibles and often no limit on what patients pay out of pocket -- the federal government would override state regulations and protections. Under Massachusetts' new law, this would force individuals to buy health insurance at any cost. If they are ill, residents would be forced into coverage that doesn't really protect them (read about patients' stories here) or pay thousands of dollars a month for decent coverage.
Patient Legal Protections Also at Stake
FTCR released an analysis last week highlighting another provision hidden in S. 1955 that will strip an individual's right to sue their insurer. The bill would extend the so-called "ERISA pre-emption" to any individuals who buy health insurance through professional associations. As a result, individuals who purchase these health insurance plans will lose their right to sue for damages if they are harmed by an insurer's decision to limit access to medical treatments. The legislation would also override hard-won Patients' Bill of Rights legislation passed in 41 states, state health insurance coverage requirements and other patient protections.