Sweatshop Insurance: O'Boehner Care & the Northern Marianas
by Bruce Webb, Wed Nov 04, 2009 at 11:14:10 AM EST
Well I have been reading through the Boehner Amendment to HR3962 and it is worse than I could have imagined. In fact it is a fricking nightmare. Someone tell me I have got this wrong. Or remove all sharp objects within my reach. Because they cannot be this brazen.
It starts innocently enough. Under Title II of the Boehner amendment employers are allowed to auto-enroll employees in any plan they choose. Employees can opt out but as near as I can see employers have no further obligation. Okay that's not good, but not much different than today.
Title III introduces a ringer. Although the Title is called Expanding Choices by Allowing Americans to Buy Health Care Coverage Across State Lines what it really means is that insurers can simply pick any state they like as their 'primary state' and be governed almost entirely by its rules in selling into 'secondary states'. Okay that is really not good, think how many credit card companies are officially based in South Dakota because of its lenient laws. But now things get nightmarish. See extended entry.
Under Title III 'State' is defined as the fifty states, D.C., Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Marianas (p.122). Insurers are allowed to designate any 'State' as their 'Primary State' which if we go back to p.199 is defined: "the term 'primary State' means with respect to individual health insurance coverage offered by a health insurance issuer, the State designated by the issuer whose covered laws shall govern the health insurance issuer in the sale of such coverage under this part". On page 121 we see that 'covered laws' include such 'laws, rules, regulations' governing among other things the 'offer, sale, rating (including medical underwriting), renewal and issuance of individual health insurance to an individual'.
After a few pages of excruciating bureaucratese we come to the following on page 126 "The covered laws of the primary State shall apply to individual health insurance coverage offered by a health insurance issuer in the primary State and in any secondary state," And this is backed up by some mandatory disclosure language on page 130 that warns insurees that their new policy is not subject to any laws of the state in which it is purchased including those which might require "SOME SERVICES OR BENEFITS MANDATED BY THE LAW OF THE STATE". "ADDITIONALLY THIS POLICY IS NOT SUBJECT TO ALL THE CONSUMER PROTECTION LAWS AND RESTRICTIONS ON RATE CHANGES OF THE STATE". (CAPS in original).
Now this language is followed by a bunch more pages setting out rules about lawsuits and appeals but the bottom line is pretty clear: should private insurers choose they can officially choose the Virgin Islands or the Northern Marianas as the governing jurisdiction for all their individual insurance policies and their is basically nothing the states of California, New York or Washington can do about it. Which is a hell of a twist on the part of people who are constantly bleating about the Tenth Amendment. Boehner just turned them over to the tender graces of the Insurance Commissioner of the N. Marianas. And since it is quite possible the N. Marianas does not have such a Commissioner now I am sure that their old lobbyist Jack Abramoff can supply a few names of suitable (and pliable) candidates.
This is not quite as bad as I first thought since I thought Boehner would have extended this cross state lines ability to employers buying group plans which combined with the auto-enrollment rules of Title II would really put employers in the drivers seat. But even if restricted just to the individual market it is horrible enough. Certainly not every individual insurer will designate the Northern Marianas as its 'primary State' but Boehner is proposing a rush for the bottom process of jurisdiction shopping for insurance companies and hiding it behind a veil of "Choice" for policy seekers.
And of course there is nothing that would prevent an extension of this to group coverage. Or employers simply dropping that group coverage in favor of some subsidy for individual insurance.
In any event if you like your 'Made in the U.S.A.' t-shirt made by near slave labor in Chinese owned sweatshops in the Northern Marianas you are going to love your 'Made in the U.S.A.' insurance plan regulated by the somewhat notorious government of the N. Marianas.