Empty Benefit Plans Marketed as "Low-Cost" Option Cost More for Less Coverage
Washington, D.C. -- Dana Christensen, a widow with insurance who was left with nearly half a million dollars in medical bills, condemned Senator Michael Enzi's (R-WY) "association" health plan legislation today that would cost patients and small business more and gut state patient protection laws.
"Insurance isn't worth a dime if it doesn't pay for treatments you can't live without," said Dana Christensen, of Playa del Rey, California. "The Senate health committee should say 'no' to legislation that would expose even more Americans to junk health insurance."
Dana Christensen owed more than $450,000 when her husband died of bone cancer even though they had "association" health insurance and had purchased a special rider for chemotherapy. On his deathbed, Dana's husband, Doug, asked her to divorce him so she would not be responsible for the bills. She refused. Her health plan eventually paid less than 18% of the bills.
A first-time vote is expected on the Bush-backed legislation in the Senate health committee today. The bill is a dramatic departure from earlier versions of the proposal because it would allow any health insurer or HMO to ignore state Patient Bill of Rights laws including pending state protections that cap the amount of money that patients must pay out of pocket for care.
The non-profit, non-partisan Foundation for Taxpayer and Consumer Rights (FTCR) debunked claims by health insurers and business associations that the legislation would provide lower cost health care. Under the proposed legislation, S. 1955, health care will cost more because patients will have to pay out of pocket for medically necessary treatment that insurers are no longer required to cover.
"Where's the affordability when business pays a little less for health care that provides no guarantees when patients get sick?" asked Carmen Balber, consumer advocate for FTCR. "If band-aids cost $2 a dozen, $1.95 for one band-aid is not a good deal."
In an attempt to woo national insurance companies who opposed the bill because they feared loosing business to the bare bones plans, Senator Enzi amended the legislation to allow any insurer to circumvent state law.
The legislation would gut state Patient Bill of Rights laws established in 41 states and remove local state oversight to replace them with weaker or non-existent "harmonized" federal standards. State rules at risk include those requiring health insurance plans to provide cervical cancer screening, banning "drive-thru" deliveries, and guaranteeing an independent review if an insurer denies coverage.
Yesterday, an independent market analyst, Weiss Ratings, released a report showing that life and health insurers' investment profits more than tripled, skyrocketing 224% to $1.8 billion in the first nine months of 2005.
"When 45 million Americans cannot afford health care at same time health insurance profits triple, we clearly need more regulation to bring prices down, not less," said Jerry Flanagan of FTCR. "Under the guise of making health care affordable, S.1955 encourages HMOs and insurers to sell coverage that provides no benefit guarantees. This bill does nothing to address out of control health care costs -- like health insurance overhead and profits -- which are now the fastest growing component of health care spending."
Instead of making health care more affordable for those who need it most, S.1955 would roll back reforms adopted by many states to require fair pricing. New weaker federal rules would supplant more protective state laws, allowing insurers to charge higher rates based on gender, age, geographic area and other factors -- without limit.
"Senator Enzi's plan will send health insurance companies on a race to the bottom, with each insurer offering patients less benefits than the one before," said FTCR's Carmen Balber.
The tragic story of Dana and Doug Christensen is part of a new online resource published by the FTCR pointing out the skeletal benefits and new burdens under such high cost health proposals. Click here to visit FTCR's resource page.
S. 1955 will be voted on in the U.S. Senate Health, Education, Pensions and Labor committee hearing, which is scheduled for 9:00 AM in Dirksen Room 420 in Washington D.C. FTCR will hold a press conference in Dirksen Room 226 at noon today.
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The Foundation for Taxpayer and Consumer Rights (FTCR) is a nonpartisan consumer advocacy organization. For more information, visit us on the web at: http://www.ConsumerWatchdog.org