Private health insurance not banned on page 16 of the House bill

We got several e-mails from readers asking if new health care legislation in the U.S. House of Representatives bans private health insurance for individuals. We tracked the statement back to its source, an editorial from Investor's 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," the editorial says. "Right there on Page 16 is a provision making individual private medical insurance illegal."

The editorial continues, "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."

The editorial, published July 15, 2009, adds, "So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers."

Since then, the allegation about Page 16 has been repeated in many blogs and by at least one member of Congress.

We read the section of the bill to which Investor's Business Daily referred, as well as a summary of the legislation provided by the House Ways and Means committee. While the quotation is correct, it's taken out of context.

Individual private health insurance means coverage that someone buys on his or her own from a private company. In other words, it's for people who can't get coverage through work or some other group, and the rates tend to be much higher.

Under the House bill, companies that offer insurance to individuals will do it through an exchange, where the government sets minimum standards for coverage. The new regulations require insurance companies to accept people even if they have previously existing conditions and to provide a minimum level of benefits, among other things.

To be sure we were reading the bill correctly, we turned to an independent health care analyst at the nonpartisan Kaiser Family Foundation. The foundation has analyzed the major health care proposals, including those of the Republicans, providing point-by-point analysis .

Jennifer Tolbert, the foundation's principal policy analyst, told us that Page 16 doesn't outlaw private insurance. "There will be individual policies available, but people will buy those policies through the national health insurance exchange," she said.

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Paul Krugman

stated on June 22, 2009 in a column

Even high estimates for an early draft of the health care plan are "less than the $1.8 trillion cost of the Bush tax cuts."

The House bill allows for existing policies to be grandfathered in, so that people who currently have individual health insurance policies will not lose coverage. The line the editorial refers to is a clause that says the health insurance companies cannot enroll new people into the old plans.

The IDB editorial has caught the attention of some of the bill's most direct supporters. Rep. Henry Waxman, a California Democrat who is guiding the legislation through Congress, wrote a letter to the publication saying the editorial was "factually incorrect and highly misleading."

The conservative Heritage Foundation also said the editorial misread the legislation, writing on its Foundry blog, "So IDB is wrong: individual health insurance will not be outlawed." Heritage believes that the new regulations will be so onerous as to drive private insurance out of business "which is effectively the same thing." But that is a substantially different argument than what the editorial said.

President Barack Obama had the chance to personally quash the IDB editorial himself when asked about it in a conference call with left-leaning bloggers. He said he wasn't familiar with the provision, before reiterating his general commitment to not forcing people out of health insurance that they like. (Impress your friends at parties by referring to the proper section on page 16 of the bill: It's Section 102.)

In response to Waxman's letter, Investor's Business Daily says it's sticking to its guns. In a follow-up editorial, it said that private insurance offered on the exchange will be too regulated to be considered true private insurance, hence its original editorial is correct that the bill bans private insurance. This seems like a creative way of covering up a factual error, though. Many private companies are highly regulated but are still considered to be private. 

The original editorial said, "Right there on Page 16 is a provision making individual private medical insurance illegal." That's not what the legislation says. When the error was pointed out, a subsequent editorial said it was still true. For perpetuating misinformation and then standing by it in the face of facts, we rate the Investor's Business Daily editorial Pants on Fire!