President Barack Obama hosted a highly anticipated summit on health insurance reform on February 25. The purpose of the meeting was to see if enough Republican ideas about health insurance could be incorporated into pending legislation to attract bipartisan support. This did not happen, however, as the president took it upon himself to rebut virtually every suggestion made by the Republicans while failing to similarly criticize Democratic talking points. Without an honest broker, the talks went nowhere.

At one point President Obama chided Republican Congressman Eric Cantor for displaying the 2,700-page Democratic health care insurance legislation as “a prop.” The Reuters news service noted, however:

“Obama’s fellow Democrats were as guilty of playing to the gallery, as they recounted tales of constituents denied healthcare coverage for pre-existing medical conditions or struggling to cope with rising premium costs. Congresswoman Louise Slaughter told of one constituent who had to wear the false teeth of her dead sister because she couldn’t afford dental care. And fellow Democrat George Miller offered himself as an example of someone who could be denied coverage for pre-existing health conditions, with a list of ailments including two artificial hips, arthritis and a kidney stone.”

Reuters was right to note that the Democrats laid the sob stories on thick. What the reporters failed to mention, however, is that the Democrats’ anecdotal accounts had no relation at all to modern-day health insurance.

Congresswoman Slaughter’s story was misleading because the legislation under consideration does not include a dental benefit for adults. Her unnamed constituent will have to continue wearing her dead sister’s dentures even if the Democratic plan passes. If anything, the story is an indictment of government-run health insurance, since the constituent most likely is old enough to receive Medicare—the Democratic paradigm of health coverage—which also does not cover dentures.

Representative George Miller’s attacks on the health insurance industry over preexisting conditions were even more disconnected from reality. He tried to use his own physical frailties to demonstrate how he would be denied coverage. “I sit here with two artificial hips, a little bit of arthritis, and I have a kidney stone,” Representative Miller said. “I’m dead in that insurance market if I have to switch policies or switch companies or look for another chance. Now, why should that be? Those hip replacements have been with me for 15 years and I have no trouble. But it’s a way of denying me care.”

Miller is dead wrong about being dead in the private health insurance market.

He would not lose his health insurance if he switched from his Congressional health plan to another group health insurance plan, because California law forbids health insurance providers from denying or delaying coverage for enrollees in group health insurance plans.

He would not lose his coverage due to preexisting conditions if he switched to an individual health insurance policy, either, provided that he enrolled within 63 days of leaving his existing plan. Oddly, Representative Miller seemed unaware of the 1996 law that guarantees portability of health insurance, the Health Insurance Portability and Accountability Act (HIPPA)—a bill he voted for in the House. Under HIPPA, a person who enrolls in a new health insurance plan within 63 days of losing or terminating coverage under an old plan will have “continuous coverage.” As a result, the duration of the previous coverage will cancel out any waiting periods under the new plan on a month-for-month basis. Representative Miller’s 35 years of prior coverage would certainly off set any waiting periods assigned because of his preexisting conditions.

Representative Miller has the added option of signing up for Medicare, since he is 65 years old—and Medicare does not withhold coverage for preexisting conditions. This is not to say that he should have to rely on the tax-payer funded program, but the fact that it is there for him underscores the point that many of the people who have preexisting conditions are older Americans who already are covered by Medicare. Millions more are covered through Medicaid, the Veterans Administration, and programs for children such as S-CHIP.

Representative Miller need a consultation with an independent health insurance agent.

Representative Miller used his false examples to condemn health insurance companies’ practices. Holding up his own prop, he said, “In fact, as you see from one of the Blue Cross companies here—there’s three pages of things that will keep you out of care, will keep you from changing your jobs, and it goes on and on and on.”  His attempt to demonize the insurance companies revealed a deep-seated ignorance of the principles of health insurance. As I have written in this blog before, health insurance companies rely on actuarial science to maintain the delicate balance between premiums charged and the losses paid out. Since the insurance providers already are required to accept customers with preexisting conditions through their group plans, they must exclude some of the costliest individual customers just to stay afloat.

That is why I advocate using government set-asides as a way to cover people who cannot get private health insurance coverage. By setting aside taxpayer money only for those people, taxpayers will know exactly where their funds are going. They also will know exactly how many of the truly uninsurable there really are. As I have calculated before, the number of people with serious preexisting conditions who are not covered through group health plans, Medicare, Medicaid, the VA, and other programs must be infinitesimal. As a compassionate people, we should offer health insurance coverage to those people, but we do not have to destroy the private health insurance industry to do so.