Here we go again. The President, who discovered that healthcare was more complicated than he had earlier believed, is going forward with a plan to allow small group insurance plans which he claims will lower prices and be good for consumers. The history of these plans is not encouraging.
There used to be plans that attempted to circumvent state insurance regulation, called ERISA plans, allowed under the same legislation that created social security. Unfortunately, many of them became known as phony ERISA plans and this wasn’t apparent until they went broke.
Most states have Guarantee associations which will protect consumers if their insurance company goes broke. Since these plans claimed to be exempt from state regulation, when they went broke, people were left with unpaid bills and no recourse. These plans were cheaper and did not adhere to the minimum benefits required by most states. In fact, they were organized under the laws of states with few or no minimum benefits so, even if they didn’t go broke, they covered very little and certainly did not cover pre-existing conditions.
And this is being offered as a way to improve the situation? I think it represents a political desire to do something on health care. Instead of encouraging the efforts of Senators Alexander and Murray, we are getting this return to a failed system. It is almost like claiming that if you cut taxes the economy will grow at a high rate even though that almost never happens. We continue to be in a “Through the Looking Glass” world.