From FTCR
Washington D.C. -- The nonpartisan Foundation for Taxpayer and Consumer Rights (FTCR) said that the substitute amendment offered by Senator Michael Enzi (R-WY) for his 'association health plan' legislation, S. 1955, creates new threats to patients and is dishonest about purported fixes to the bill. The substitute was introduced today in response to broad criticism about the bill's pre-emption of state patient protection laws and is currently being debated on the Senate floor.
Enzi Claim 1: The substitute does not shift oversight of insurers from states to the federal government.
Reality: In fact, the substitute takes away states' ability to set strong insurer oversight rules and requires states to follow weak or non-existent federal standards.
Enzi Claim 2: The bill does nothing to limit a patient's ability to "petition the state courts."
Reality: The consumer may be able to petition a state court but the case would be removed to federal court where no damages are allowed even though today those who buy insurance on their own can sue in state court for damages. The bill, S. 1955, would extend the so-called "ERISA pre-emption" to any individuals who buy health insurance through associations. As a result, individuals who purchase these health insurance plans will loose their right to sue for damages if they are harmed by an insurer's decision to limit access to medical treatments.
Enzi Claim 3: The so-called "harmonization" standards pre-empting state laws only address "mechanical aspects of health insurance regulation and not consumer protections."
Reality: Enzi claims that changes to his bill remove pre-emption of state consumer protection laws. In fact, the substitute bill's "harmonization standards" would pre-empt state market conduct exams, prompt payment of claims requirements, and a patient's ability to appeal an insurer's decision to deny necessary medical care (Title III Section 2933(b)(6)).
"Market conduct exams" under state control allow local regulators to investigate insurance company practices that harm patients. For example, the California Department of Managed Health Care (DMHC) used this power to investigate Kaiser's error-ridden kidney transplant clinic that put hundreds of patients at risk.
New Threats Appearing in Enzi Substitute
The substitute bill removes protections against insurer control of a "small business" or "association" health plan by removing a requirement that employers elect representatives to the oversight board that administers the health plan (Title 1, Section 103(b)(1)(C)). As result, insurers could design insurance policies that guarantee their profits but offer no protections for patients when they get sick. Employers would not be allowed to intervene on their workers behalf.
Fundamental Flaws of S. 1955 Remain
Provision
S. 1955 --------- S. 1955 Substitute
Pre-empts States' Ability to Regulate Health Insurance
Yes ------------------ Yes
Allows Business Associations to Profit from Selling Insurance
Yes ------------------ Yes
Blocks Patients' Ability to Recover Damages when Defrauded
Yes ------------------ Yes
Removes Regulators' Ability to Investigate Kaiser Kidney Transplant Scandal
Yes ------------------ Yes
Allows Cherry-Picking of Healthy Patients
Yes ------------------ Yes
Allows Insurers to Charge More Based on Age and Medical Histories
Yes ------------------ Yes
Allows Insurers to Sell Junk Coverage w/out License
Yes ------------------ Yes
Creates Epidemic of Underinsured By Pre-Empting State Coverage Requirements
Yes ------------------ Yes
http://www.consumerwatchdog.org/healthcare/pr/?postId=6234