http://www.nationalreview.com/node/369891/print
In his State of the Union address Tuesday night, President Obama repeated one of the biggest lies behind the Affordable Care Act (ACA), and it wasn’t that you could keep your health-care plan or your current doctor. In fact, most people don’t even know it’s a lie.
That became obvious when he received a standing ovation after saying it: “Because of this law, no American can ever again be dropped or denied coverage for a preexisting condition like asthma, back pain, or cancer.” The president and his supporters keep pretending that, before the ACA, an insurance company could drop individual policyholders, when in reality it could not.
Comes as a shock, doesn’t it? But the truth is that for decades there have been safeguards in our health-insurance system to protect people just like the physician’s assistant, Amanda Shelley, mentioned by the president.
Before 1996, if you purchased individual health insurance through a broker, you would have been offered a “guaranteed renewability” option. This would guarantee that your policy could not be canceled if you developed an expensive and chronic condition. The insurance company would also have to renew the policy on its anniversary date without charging a higher premium because of the chronic condition. This option was so popular that, by 1996, 75 percent of people buying individual health insurance also bought the guaranteed-renewability option.
Then, in 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA). Among HIPAA’s many mandates was the requirement that all individual insurance plans have guaranteed renewability. It also prohibited all group health-insurance plans sold to businesses from denying coverage to individuals because of preexisting conditions.
And so, for the past 18 years, all insurance companies have been legally forbidden from dropping an individual policyholder who developed a chronic illness and have not been able to raise anyone’s rate because of it.