The day after Congress voted to take control of every American’s access to medical services, Prof. Paul Krugman’s column in the NY Times did a victory lap in which he misquoted Speaker Newt Gingrich, trafficking a discredited report that Mr. Gingrich thought that LBJ’s civil-rights legislation had destroyed the Democratic party for 40 years.
But his last column before the vote was the strangest. It cheered the claim, made by the president and his allies, that the “reform” will make it illegal for a health insurer to “drop” policyholders after they become sick. As I’ve explained previously, this is an irrelevent argument because such behavior is already illegal under both state and federal law.
And Professor Krugman proved it. The case concerned a 17-year-old in South Carolina who had an individual health-insurance policy issued by Assurant Health, subsidiary of Fortis, which is a large for-profit Belgian health insurer. (That, in itself, makes one reflect on the over-simplified descriptions of European versus U.S. health care, doesn’t it?)
After the young man was diagnosed with HIV, Assurant Health allegedly scoured his medical records, determined that he had contracted HIV before he applied for the policy, but had failed to disclose it. The health insurer used this as grounds to rescind his policy. The youth denied the charge; and sued the health insurer. The result? A South Carolina jury awarded the youth $15 million in damages.
Given such a judgment, I’d argue that it’s impossible to claim that policyholders have no protection against bad-faith actions by insurers. It’s certainly a strange case to cite in support of yet another federal law to protect health consumers.
But Nicolas Kristof’s column was even stranger. It concerned a family whose wife was diagnosed with stomach cancer, for which she received an operation, but then the for-profit insurer canceled her coverage, labeling the cancer a “chronic condition,” which the insurer claimed the policy did not cover.
Sounds like a good call for better insurance regulation to me. The only problem is that the family lived in Hong Kong (which was ruled by Communist China the last time I checked), and the policy issued by a British insurer.
What this has to do with health-insurance regulation in the U.S. is beyond my understanding. But so what? The specious arguments in favor of the “reform” have just begun. Now that the president has his mojo back, we can expect his media cheerleaders to send more of them our way — fast and loose.
— John R. Graham is director of Health Care Studies at the Pacific Research Institute.