Recently, California stated that it was unable to battle the legal team of the insurance industry over California's ban on rescission. The result, in practical terms, is that the ban is unenforceable and does not help Californians. This issue is of great importance in the Senate and House legislation over health care because it appears that the Congress is leaving it up to state insurance commissions to enforce provisions over rescissions and other consumer protection mechanisms. Indeed, these consumer protection mechanisms are the basis for claims by the industry that we need to mandate individuals to buy the industry product. However, without a viable mechanism of enforcement, this brings into question whether even this argument is valid. I intend to look at the question of regulatory enforcement briefly in this diary.
Here's the California situation:
"California regulators admitted Thursday that for more than a year they didn't even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because it feared they would be outgunned in court."
"In each and every one of those rescissions, (Blue Cross has) the right to contest each, and that could tie us up in court forever," Ehnes said of the approximately 1,770 Blue Cross rescissions between Jan. 1, 2004, and now.
"They have the largest number of rescissions, so as a practical matter for the department it does present some practical challenges that are different from a Health Net (of California) or a PacifiCare," referring to providers who, along with Kaiser Permanente, have made settlements with the state to reinstate health care coverage.
LINK
This issue is important because the health care bills seem to leave the enforcement of the consumer protection provisions unclear. Thus, on top of the language of the bill being fairly weak regarding multiple loopholes and/or weak provisions when compared to other regulatory regimes such as the Dutch (I survey the issues discussed here by McJoan and multiple other sites), there remains the issue of actually enforcing the bill's language.
Even if you believe,"The bill includes strong insurance reforms that prevent companies from denying coverage due to pre-existing conditions or from dropping people simply because they get sick - a practice known as rescission." There are, "serious questions ... as to how enforceable those provisions will be."
LINK
This issue is of extreme importance for a few reasons. First, enforcement is how we guarantee that people's rights are protected. Second, if we leave it solely to individuals to protect their rights, insurance companies will simply tie those cases up in courts. This is the traditional approach of lawyers in this area of practice: They wait a certain number of cases out. In the meanwhile, people will die due to the waiting. Thus, case over. Third, the courts are packed with conservatives looking to narrowly define laws.
The later point is especially important. For the last 30 years, the courts have been packed with conservatives hell bent on narrowly interpreting laws to defeat their impact on corporate America.
We know the industry engages in the following practices:
"Insurers today routinely claim that patients engaged in "fraud" or "intentional misrepresentation" when dropping them from coverage. Much depends on who defines the terms in the bill.
It won't be the federal government. There will be no federal agency tasked with overseeing the enforcement of the bill's rules. Rather, a Senate leadership aide told reporters in a briefing Saturday, individual states will police the new system."
LINK
If I remember the exchange correctly, one of the more telling moments during the Alito hearing was when he explained how he found that someone working in a mine is not a "mine worker" for the definitional purpose of a statute. This is the issue that we face here even if we managed to have the resources to move rescission cases into the courts.
I want to thank jeopardy at Mydd.com for first noting this issue.
I think is is a crucial element of the debate that needs to gain wider attention. Therefore, I am posting this diary here so that people can think about the issue more.
Finally, my view is that without strong language in the bill or a viable means of enforcing the language that is in the bill- this makes the language meaningless or non-binding for all practical purposes. Therefore, the mandate need to be removed since its reason for being in the bill is no longer applicable.