Washington, DC — Consumers and the White House should celebrate a decision by a Virginia judge to strike down the highly unpopular federal mandate to purchase health insurance and preserve the rest of the federal health care reform law.
“Today's ruling makes clear that the popular and progressive parts of healthcare reform could go forward without the big sop to health insurance companies — mandatory purchases without regulated premiums,” said Jamie Court, president of Consumer Watchdog and author of The Progressive’s Guide To Raising Hell. “When a George W. Bush appointee agrees that invalidation of the mandate does not mean killing the best parts of health care reform there is cause for celebration. This ruling stands with what two-thirds of Americans believe–the mandate is wrong but the subsidies and protections against health insurers are widely favored.”
The insurance industry has proven, with ever-higher rate increases leading up to the beginning of the mandate in 2014, that it puts profit and stock prices above any duty to provide health care, said Consumer Watchdog, and the mandate will just give the industry a larger customer base to abuse at will.
Seventy percent of Americans oppose a mandate, according to recent polling. President Obama, during his 2008 campaign, argued consistently against a health insurance mandate. He said: "I believe the problem is not that folks are trying to avoid getting health care. The problem is they can't afford it. And that's why my plan emphasizes lowering costs."
(See poll results against the mandate at http://www.kff.org/kaiserpolls/upload/8093-F.pdf See page 6.)
"When the insurance lobby killed the public health insurance option and any requirement for regulation of insurance rates, consumers were left defenseless against double-digit insurance rate increases," said Judy Dugan, research director of Consumer Watchdog. "Removing the purchase mandate gives the states more reason to restore a public option and help keep insurance affordable through tough regulation."
The nonprofit, nonpartisan Consumer Watchdog argues that instead of a mandate, an amended federal health reform law–or the individual states–could prevent gaming of the requirement that insurers sell to all comers. For instance, those who sign up in the first months after the law becomes effective could be offered lower rates, and enrollment could thereafter be limited to one yearly period, as with Medicare supplement plans.
Sen. Ben Nelson of Nebraska, a reluctant supporter of the health reform bill, said he is already preparing legislation that would offer financial inducements to buy insurance in place of the mandate.
Consumer Watchdog noted the success of states like Oregon in reducing double-digit premium increases merely by taking full advantage of existing state health insurance regulation laws during 2010. Oregon is also seeking a federal waiver that would allow it to greatly expand its own modest public health insurance system.
New York is re-instituting a tough health insurance regulations requiring prior state approval of rates before they are implemented. From about 1995 to 2000, a previous prior approval law was successful in steadily holding down rate increases. When the prior approval law was rescinded under a promise by insurers to "self-regulate," rates soared.
In California, similar prior approval regulation of property and casualty insurance was approved by voters two decades ago. It halted spiraling auto insurance rates and saved the state's motorists more than $62 billion since the law's passage, according to a 2008 study by the Consumer Federation. The state Legislature is expected to consider similar regulation of health insurance next year, after Blue Cross was caught using "mathematical errors" to demand increases of up to 39%.
While the Virginia decision by District Court Judge Henry Hudson would apply only within the state, it should jolt the White House, Congress and consumer advocates into seeking fairer ways to insure millions more Americans, said Consumer Watchdog.
"If the last two elections have taught Washington a lesson, it's that we can do anything if 70% of Americans agree and do nothing if a majority cannot agree," said Court. "The health insurance purchase mandate is not necessary for health reform to work, and eliminating it would increase the focus on reducing costs and premiums."
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Consumer Watchdog is a leading nonprofit, nonpartisan consumer advocacy organization. For more information, see www.ConsumerWatchdog.org