Mike Pence Doesn’t Understand Health Insurance Exchange or FEHBP

Another one form the annals of “Mike Pence isn’t very bright” comes to us courtesy of my colleague Igor Volsky who observes this to-and-fro in which Rep. Pence says people should buy health insurance the way members of congress do, and then proceeds to condemn “government-run” health insurance exchanges:

Republicans believe that in addition to tort reform what we should allow Americans to do is to purchase health insurance the way members of Congress can, the way all federal employees can and that is to buy health insurance across state lines to get out there and allow new insurance products to be created in a new competitive marketplace…even the private insurance elements in the Exchanges, you know, are essentially government controlled and government dictated.

This is not—at all—an accurate description of how members of congress get their health insurance. Members of congress purchase health insurance via the Federal Employees Health Benefits Program which we had occasion to discuss yesterday. This operates, essentially, the way the Health Insurance Exchange works in the major reform proposals. A large potential pool of customers is assembled that’s very attractive to insurers. But in order to get at the customers, you have to play by certain rules. As Volsky says “private insurers participating in FEHBP cannot deny coverage to applicants with pre-existing conditions, charge exorbitant out of pocket fees, rescind coverage or discriminate based on gender or age.” In other words, they’re subject to similar regulatory mandates as would be put in place in the Exchange.

If federal employees were simply invited to buy health insurance across state lines, they would presumably just all be stranded on the dysfunctional individual insurance market. Pence doesn’t sit on any of the committees relevant to health care or to federal personnel management, which perhaps explains why he doesn’t know what he’s talking about. At the same time, that only raises the question of why he’s talking about this on television at all.