How do the House and Senate bills affect the insurance industry?
According to the Senate Health, Education, Labor and Pension Committee staff, the House and Senate bills try to achieve three things. First, they eliminate industry practices that limit coverage for people. The bills, if enacted, would eliminate medical underwriting, which means companies can’t refuse to insure people with pre-existing medical conditions. They would end caps on the benefits that will be paid over the life of the insured. They would end rescissions for medical reasons, meaning a company couldn’t cancel a policy if it discovered the policyholder had an undisclosed medical condition when the policy was issued. Second, they eliminate what is known as adverse selection by requiring everyone to have insurance and penalizing anyone who doesn’t buy coverage or enroll in public programs for which he or she is eligible. Adverse selection occurs when only people who are sick buy insurance. Eliminating coverage limitations to allow sick people to buy insurance would drive up every
