"Outlawing Private Insurance" Is the New "Obama Birth Certificate"

Did you hear about how the constant mantra of "If you like what you have, you can keep it?"  isn't true?  That President Obama, or the House Democrats, or the Romulans somehow snuck a clause onto page 16 of HR 3200 (America's Affordable Health Choices Act) which would effectively outlaw private insurance?  That private insurance would be forced not only to compete with the private plan but become no different than the public plan?  It's insidious - how did they think we wouldn't notice?

Well, for starters, because it ain't there.

This is not a new strategy for killing reform.  Betsy McCaughey in the 1990s performed a hideously inaccurate "close reading" of Bill Clinton's reform bill, complete with section number citations, that seemed to suggest that everything you could possibly fear about Clinton care really was true.  Of course, it still wasn't, and the idea that a politician who had popped out of nowhere (but soon would be running for Lt. Gov. of New York on the Republican ticket) had found hidden passages that every policy wonk had missed was always a little fairy tale-ish.  But once her article hit The New Republic, it couldn't be retracted, and the forces of a status quo were able to effectively scare the bejeesus out of the general populace.

In 2009, however, we have the blogosphere, including yours truly.  Two stylistic points before we hit the heart of the matter:

1.)  Much like the president's birth certificate, which suddenly is in the news again (in addition to being right here), this is a manufactured controversy.  Not only that, it strains the bonds of credulity.  First Read asks of the birthers:  "Let's get something straight: If Obama weren't a United States citizen, don't you think the Clinton campaign (first) or the McCain camp (second) would have said something during the two-year-long presidential campaign?"  Ditto with HR 3200.  If it actually outlawed private insurance, don't you think the Eric Cantors and Paul Ryans of the Right would be bringing it up every chance they got - and don't you think the John Conyers and the Dennis Kuchinichs of the Left would be doing an end zone dance?

2.) Honestly, if the Romulans were going to hide something that explosive in a 1,018 page bill, don't you think they would have made sure to hide it outside the first 20 pages? (Personally, I'd hide it in page 898, which is the section on the Public Health Workforce.  Just seeing that page number makes me sleepy.

So what is on this page 16?  This describes what happens to the completely unregulated individual insurance market which, not for nothing, is where the abusive parts of private insurance are on most frequent display, including exclusions on the basis of pre-existing conditions.  If you already have a health insurance plan - nothing happens for the first five years.  And by nothing, I mean nothing - they can't accept new customers but they also can't jack up your rates (individual market plan customers for Anthem Blue saw their premiums jump 30-40% this year).  After year 5, the ground rules change.  If the plan you're enrolled in as an individual meets the minimum standards offered in the Health Insurance Exchange, that's fine.  If not, the private insurance company is required to offer you a plan that does meet the minimum standard benefits.

What determines what goes into this minimum standard benefits?  You might want to keep on reading to page 27.  The qualified benefits package includes coverage for hospitalization, doctors visits, prescription drugs, mental health, maternity, etc. that is defined to be "equivalent to the average prevailing employer-sponsored coverage." So right from the start, the definition is what private employer-sponsored plans are already providing.  The Health Insurance Exchange is itself populated with private insurance options and, according to page 81, anyone buying from this transparent marketplace, whether because their employer doesn't offer them insurance or because they work for a small business "may choose coverage under any such plan" both for themselves and for their dependents.  And, of course, those who cannot afford a plan are subsidized so they only pay a fraction of their income, and Uncle Sam picks up the rest.

Read that again.  Not only is private insurance not being outlawed, it's receiving subsidies from the federal government.

Some of the folks who have emailed me presume that the House is trying to rig the game in favor of the public health insurance option, which is already widely expected to give the private insurance market real competition particularly on cost and quality.  But they've got it backwards.  If the measure of the benefits is that they're equivalent to prevailing employer-sponsored private coverage, it's private insurance that's driving the conversation.  (And believe me, this drives progressives who were hoping for a stronger public option up the wall!  That frustration and outrage can't be feined.)

So I suppose it may be somewhat misleading to say, "If you like your coverage you can keep it."  It would be more fair to say, "If you like your coverage, and it isn't so insufficient and abusive that even most private insurers would have qualms screwing you over that badly, you can keep it."

Update: (7/23/09 at 9:05 am PT)

Ezra Klein's says the same thing shorter and funnier.

(Photo credit:  alvy on Flickr.)