Does the Democratic Health Care Plan Ban Private Insurance?

That’s a claim that is making the rounds these days, based on this editorial by Investors Business Daily:

It didn’t take long to run into an “uh-oh” moment when reading the House’s “health care for all Americans” bill. Right there on Page 16 is a provision making individual private medical insurance illegal.

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of “Protecting The Choice To Keep Current Coverage,” the “Limitation On New Enrollment” section of the bill clearly states:

“Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day” of the year the legislation becomes law.

Is this a fair reading of the current House health care plan? Not quite. The bill doesn’t exactly “ban” private insurance. Rather, the quoted provision is a “grandfather” clause that allows insurance plans that are not “qualified health benefits plans” to remain in existence for a limited time after the “reform” bill is enacted. Those plans–the ones that don’t provide all the coverages demanded in order to “qualify” under the proposed statute–are indeed prohibited from enrolling new members.

So Barack Obama’s constant assurance that, if you like your current coverage you can keep it, is misleading at best. You can keep it for a while, but your company can’t enroll any new members in the plan, and if you change jobs, you’re probably out of luck. “Non-qualifying” plans are obviously slated for extinction; if they can’t enroll new members, they can’t survive for long. When the “non-qualifying” plan that you like ceases doing business, you, too, are out of luck.

The Democrats would say, of course, that this doesn’t mean they are “banning private insurance.” Rather, once their plan goes into effect, all private insurance will have to “qualify” by meeting the criteria that are partly set out in the statute, but are to be developed more fully by a panel that will be appointed by the government. What that means in practice is that a private insurance plan will be allowed to exist only if it is the same as the government plan. Since the government plan will be taxpayer-subsidized, no private plan will be able to compete effectively with it if the private plan is required to provide the same coverages. So the consumer–you–will have no choice. You will have to buy the plan the government designs.

Private insurance companies would easily be able to compete with the government plan if they could offer coverages tailored to the needs of consumers. For example, you might not plan on getting an abortion, so you don’t need abortion coverage. You might be willing to forgo mental health coverage. But you won’t have any such choice: “qualified” plans, the only ones who can legally enroll new members, will have all the features required by the federal government.

The Democrats’ intention, obviously, is to drive private insurance into extinction so that we wind up with a “single payer” system, i.e., socialized medicine. In fact, in the health care proposal that Barack Obama put up on his web site during the campaign, he made it explicit that no private carrier would be allowed to compete with the government by offering a cheaper health insurance policy. That goal is achieved in a slightly different way by the proposals the Democrats are now debating.

So, while it isn’t quite correct to say that the House bill “bans private insurance,” it certainly is correct that the bill is intended to destroy competition and your opportunity to pay for your health care through a private carrier.

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