Following conservative radio host Rush Limbaugh and the Media Research Center, Fox News host Sean Hannity and Fox Business' David Asman echoed false claims in a July 15 editorial by Investor's Business Daily, which stated that the House health care reform bill includes “a provision making individual private medical insurance illegal” and that the “provision would indeed outlaw individual private coverage.” In fact, the bill does no such thing.

On the July 16 edition of his Fox News show, Hannity stated:

HANNITY: The one thing that we do know in the health care bill is that it's gonna literally -- the bill says -- Investor's Business Daily had an article today -- and the bill says that if you don't have your insurance the year this legislation is implemented, you can't have a private insurance company. So that will end -- hang on -- that will end private insurance.

And on the July 16 edition of Fox Business' America's Nightly Scoreboard, during an interview with Rep. Bill Cassidy (R-LA), Asman stated:

ASMAN: There's a little paragraph that was found by the Investor's Business Daily today in there that says the individual -- and I'm quoting from the document -- “The individual health insurance issuer does not enroll any individual in coverage on or after the first day of the year this legislation becomes law.”

Now that has suggested to some that this document wants to outlaw private insurance after the new government insurance company comes into existence. Do you agree?

Cassidy responded: “Yes, I do agree. And there's also some ways that it does it more subtly.”

In fact, as Media Matters for America has noted, the provision to which the editorial referred establishes the conditions under which existing private plans would be exempted from the requirement that they participate in the Health Insurance Exchange. Individual health insurance plans that do not meet the “grandfather” conditions would still be available for purchase, but only through the Exchange and subject to those regulations.

In its editorial, Investor's Business Daily claimed:

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of “Protecting The Choice To Keep Current Coverage,” the “Limitation On New Enrollment” section of the bill clearly states:

“Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day” of the year the legislation becomes law.

So we can all keep our coverage, just as promised -- with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

In fact, the paragraph in question states in context [emphasis added]:

SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

(a) GRANDFATHERED HEALTH INSURANCE COVERAGE DEFINED. -- Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term ''grandfathered health insurance coverage'' means individual health insurance coverage that is offered and in force and effect before the first day of Y1 [2013] if the following conditions are met:

(1) LIMITATION ON NEW ENROLLMENT. --

(A) IN GENERAL. -- Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

(B) DEPENDENT COVERAGE PERMITTED. -- Subparagraph (A) shall not affect the subsequent enrollment of a dependent of an individual who is covered as of such first day.

Sec. 102 subsection (c) states that “Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan.”

According to the House Ways and Means Committee's summary of the bill, the Health Insurance Exchange “creates a transparent and functional marketplace for individuals and small employers to comparison shop among private and public insurers.”

From the July 16 edition of Fox News' Hannity:

HANNITY: There were actually, if you look at the bill -- Investor's Business Daily had a great piece today -- and under the Orwellian headline, “Protecting the choices to keep current coverage,” they actually go into very specific detail, and what they -- they put in here: “If an individual, for example, a health insurer, if you don't enroll the individual in such coverage in the first effective date of coverage” -- if it's on or after the first day of the year this legislation becomes law, you cannot go into a private plan. Does that eliminate private insurance and competition?

[...]

HANNITY: The one thing that we do know in the health care bill is that it's gonna literally -- the bill says -- Investor's Business Daily had an article today -- and the bill says that if you don't have your insurance the year this legislation is implemented, you can't have a private insurance company. So that will end -- hang on -- that will end private insurance.

From the July 16 edition of Fox Business' America's Nightly Scoreboard:

ASMAN: Now, let me ask about this 1,000-page document that Democrats came out with earlier in the week that include all these tax measures and everything. There's a little paragraph that was found by the Investor's Business Daily today in there that says the individual -- and I'm quoting from the document -- “The individual health insurance issuer does not enroll any individual in coverage on or after the first day of the year this legislation becomes law.”

Now that has suggested to some that this document wants to outlaw private insurance after the new government insurance company comes into existence. Do you agree?

REP. BILL CASSIDY (R-LA): Yes, I do agree. And there's also some ways that it does it more subtly.