Now that the healthcare bill has officially become law, there are many questions being raised about whether or not the federal government has the capacity and the knowledge to run and administer an insurance program of this magnitude. This law literally effects every man, woman and child in the United States.

In addition to the new health insurance program and Medicare, there is yet another national insurance program run by the federal government – the National Flood Insurance Program (NFIP). As Congress congratulated itself for passing the healthcare bill and headed out of town on recess, our legislative branch neglected to take care of this insurance program that they were already running. Given that authorization for NFIP lapsed at midnight on Sunday, March 28th, this action – or inaction, as one might say – does not exactly engender faith that they will be any more responsible with the healthcare system in our country.

A fact probably known only to those who live in a flood plain: all flood insurance is provided by the federal government through your local insurance agent. The National Flood Insurance Program was established in 1968, and later made mandatory in Special Flood Hazard Areas (SFHAs) in 1973. The Act was amended once again in 2004, when Congress put a two-claim limit on flood insurance policies. According to a memo released by FEMA, “NFIP will not be able to: (a) issue new policies, (b) increase coverage on existing policies, or (c) issue renewal policies.” What this means is that, if you are scheduled to close on a house or any other type property located in a flood plain during this hiatus, your bank will be forced to delay your closing until Congress restores the program. We know that this will not happen until they reconvene on April 12, 2010. Once they are in session, it is difficult to know when the Senate will take up the matter. For certain, nothing will get done anytime soon.

Another stall in the housing market is not what we need to help our economy recover – especially since that return to balance is partially driven by the real estate market. If you are paddling a canoe in your front yard in Connecticut or Rhode Island this week, and your policy was up for renewal this week, you are probably wondering what is going to happen to you. To put that into perspective, you accidental canoeists will be in a very similar boat under the new healthcare plan, when confronted with a medical condition in the years ahead.

While NFIP issue might not be getting a great deal of attention right now, it does illustrate Congressional ineffectiveness in managing mandated programs. Unfortunately, this can be interpreted as only a preview of what is to come in the months and years ahead of us. The government’s inability to act when it should, and act when it should not, will undoubtedly leave millions of Americans mired in layers of bureaucratic red tape – a situation which will haunt our new health insurance program as it now haunts the NFIP. Grab a paddle, people. Rough waters ahead.

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