The Denver branch of the PR firm Strategies 360 has helped spread the biggest falsehood of Obamacare supporters: the before Obamacare, insurers could legally cancel people’s policies after they get sick. Both Federal Regulations and state laws forbid this.
Writing for a campaign called “Protect Your Care,” Courtney Law of Strategies 360 writes:
The heart of the law is to hold insurance companies accountable by prohibiting them from cutting off coverage for people with pre-existing conditions.
For years, insurance companies could drop your coverage if you were diagnosed with cancer or diabetes, if your toddler developed asthma or if your husband hurt his back.
Unless I am missing something, this claim is utterly false, though it has been used to sell Obamacare to the electorate. In 2009, John Graham (then of the Pacific Research Institute) wrote a blog post titled: “Someone Please tell the President: It’s Been Illegal to Drop Coverage Since 1997.” It begins:
Title 45 of the Code of Federal Regulations (45 CFR § 148.122) is about “guaranteed renewability of individual health insurance coverage.” Paragraphs (a) and (b) read as follows:
(a) Applicability. This section applies to all health insurance coverage in the individual market.
(b) General rules. (1) Except as provided in paragraph (c) of this section, an issuer must renew or continue in force the coverage at the option of the individual.Paragraph (c) releases the health insurer from the obligation to renew coverage if you haven’t paid your premiums, if you’ve committed a fraudulent act under the terms of the coverage, if you move out of the insurer’s coverage area, or if you quit an association through which you’ve purchased insurance.
These are all reasonable limits, and there’s no necessity for such federal regulation. Despite the president’s claim that “no one holds these companies accountable for these practices,” state insurance commissioners do, in fact, enforce good-faith execution of insurance contracts. President Obama should know this because Kathleen Sebelius, his Secretary of Health and Human Services, served as Insurance Commissioner in Kansas.
This suggests that Obama and his appointees are not merely ignorant of the law, but are willing deceiving the electorate into thinking that Obamacare bans something that is already illegal. (And as a violation of contract, should be illegal.)
If a health insurer drops you because you’ve misrepresented your health status on your application, it’s called “rescission.” If the insurer does it illegally, it’s called “post-claims underwriting.”
In a more recent article, “Most Popular Part of Obamacare Is Redundant,” Graham adds:
In the final version of Obama’s health care legislation, H.R. 3590, section 2712 states an insurer “shall not rescind such plan or coverage with respect to an enrollee once an enrollee is covered under such plan or coverage involved, except that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage.”
Such behavior is already illegal under state laws.
In my state of California, the law is found in both the Insurance Code § 10384 through 10384.17, and the Health & Safety Code § 1389.3.
…[T]he relevant provisions … in the Illinois Administrative Code Title 50 § 2005.40(d) through (f) and the Merged Iowa Code and Supplement Title XIII § 514A.3.1.b, respectively.
Some background on Strategies 360: Strategies 360 is “a national government affairs and public relations shop being headed up locally by Democratic operative Tyler Chafee,” writes Tim Hoover of the Denver Post. Hoover continues: “[Courtney] Law will work on the Colorado effort of Know Your Care, Protect Your Care, a national campaign to defend the Affordable Care Act.”
For more on rescission and post-claims underwriting, see:
- Most Popular Part of Obamacare Is Redundant, John R. Graham, Health Care News, June 2010.
- Rescissions: Much Ado About Nothing, John Goodman.