Showing posts with label Individual Health Insurance Market. Show all posts
Showing posts with label Individual Health Insurance Market. Show all posts

Thursday, November 21, 2013

"If You Like Your Doctor You Will Be Able to Keep Your Doctor. Period"

I think you can guess who said that.

Actually, here is what the President said at the American Medical Association Meeting in July, 2009––and likely lots more times:
"No matter how we reform health care, we will keep this promise: If you like your doctor, you will keep your doctor. Period. If you like your health care plan, your will keep your health plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what's broken and build on what works."
We have all heard this repeated many times before in recent weeks. But with the front-page story in the Washington Post this morning, "Health Insurers Limit Choices to Keep Costs Down," it's as if somebody rang a new bell this time focused on the "you will keep your doctor" part.

Wednesday, November 20, 2013

Small Group Health Insurance "Cancellations"––The Next Shoe to Drop But a More Complicated One

Obamacare is impacting the small group insurance market in many of the same ways as the individual health insurance market. While employers with less than 50 workers don't have to provide coverage, if they do they are required to comply with the same essential benefit mandates, age rating changes, and pre-existing condition reforms the individual market faces.

That means essentially all small group policies cannot continue as they are––they have to be discontinued.

Thursday, October 31, 2013

"Substandard Plans" Offered by "Bad Apple Insurers"––Does the Obama Administration Understand How the Health Insurance Market Works?

Yesterday, the President said in Boston that the millions of people who are getting cancellation letters ending their coverage in the individual health insurance market are being saved from "substandard plans" that were sold to them by "bad apple insurers."

I guess these would be the same insurers his staff invited to the White House last week. In their statement following that meeting, the White House said they were "committed to working in partnership with the insurers" toward implementation of the Affordable Care Act.

So, this is how he treats his "partners."

Are health insurance plans in the individual market substandard?

Not the overwhelming bulk of them.

How do I know that?

Tuesday, October 29, 2013

Mr. President: I like My Health Insurance and I Would Really Like to Keep It––Can You Help Me Out Here?

How many times have I talked on this Blog about rate shock, the millions of people who would be getting cancellation letters from their current health plan, and the problem of people having to put up with more narrow networks?

And, how many times have those predictions been met by push back and spin: Today's policies are just junk and people will be better off finding lower cost health insurance under Obamacare.

Thursday, December 13, 2012

More Predictions of Rate Shock Because of the New Health Law

Last week, I reported on my informal survey of health insurance companies and their estimate for how much rates will rise on account of the Affordable Care Act ("Obamacare").

Today, there are press reports quoting the CEO of Aetna with their estimate. The Aetna estimate is worse than mine.

Tuesday, December 4, 2012

The Affordable Care Act: Ten Months to Launch "Obamacare"––Get Ready for Some Startling Rate Increases

What will health insurance cost in 2014?

Will the new health insurance exchanges be ready on time or will the law have to be delayed?

There Will Be Sticker Shock!
First, get ready for some startling rate increases in the individual and small group health insurance marketplace due to the changes the law dictates.

Thursday, March 29, 2012

What Would Individual Health Insurance Cost if the Court Strikes the Mandate Down and Still Requires Insurers to Cover Everyone?

With the Supreme Court justices sounding like they might strike the mandate down, this is a question I've been getting a lot lately.

I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.

In 1992, New Jersey passed health insurance reform that required insurance carriers to either offer individual health insurance on a guaranteed issue basis or pay an assessment to carriers that did. Other elements of the legislation were:
  • Guaranteed coverage and renewability for all eligible people regardless of their health status. A pre-existing condition exclusion does allow insurers to limit coverage during the first 12 months (a limitation which is not contained in the Affordable Care Act).
  • Guaranteed renewal of policies, provided (1) the insured does not become eligible for coverage under a group plan; (2) premiums are paid in a timely fashion; and (3) no fraud is committed by the insured.
  • Community rating of the premiums, with variation allowed only for family status (single, adult plus child, husband and wife, and family). (The Affordable Care Act allows rate variations of up to three times from young to old.)
  • Standardized insurance plans, referred to as Plans A, B, C, and D (indemnity options) and a single HMO plan.

New Jersey does not have a individual mandate or any other means to encourage participation in the health insurance pool.

What does the health insurance market look like today in New Jersey?

First, there are relatively few insurance plans participating in the New Jersey insurance market. According to the New Jersey Department of Banking and Insurance, if you want to buy a two adult plan with a $2,500 deductible and 80% coinsurance for example, there are only three carriers offering it. Aetna at $4,913 per month, Celtic at $12,322 a month, and Horizon a $6,127.78 per month. These rates do not vary by age.

You can buy a $2,500 deductible, 80-20 coinsurance plan for a family. Only one health plan, Oxford, offers it and it is age rated. If you are age 25, it will cost $2,498.20 a month, at age 40 it will cost $2,978.75 per month, and at age 60 $4,054.97 per month.

The cheapest family plan I found on the state site is a Horizon plan with a $10,000 deductible that costs $1,434.72 a month--$17,217 a year. The cheapest HMO plan was a Horizon plan for $1,546.08 a month--$18,500 per year. Although, the state does also offer very limited and scheduled benefit plans that cost as little as about $600 per month.

You can see the complete chart of rates at the New Jersey state website by clicking on the icon: "See Monthly Rates for All Standard Plans."

If anyone has Anthony Kennedy's email address I'd appreciate your sending this over.

Wednesday, March 28, 2012

If the Supreme Court Overturns the Individual Mandate

First, trying to predict how the Court will rule is at best just speculation. I know what Justice Kennedy said both today and yesterday and it certainly doesn’t look good for the Obama administration and upholding at least the mandate.

But I will remind everyone, based upon oral arguments, most Court watchers expected a ruling in favor of the biotech industry on a recent case involving health care patents. “Surprisingly,” the Court ruled against the industry.

Whatever the justices are now thinking, there isn’t a lot anyone could do differently until we actually get a ruling and know exactly what gets thrown out, if anything, in the 2,800-page law.

But if the mandate is overthrown, then what?

First, exactly how the Court rules on severability will be critical. What could go out with the mandate?

The Obama administration has smartly tried to build a firewall around the rest of the Affordable Care Act (ACA) by arguing before the Court that only the insurance reform elements of the bill should fall if the mandate goes down—that the mandate is the only quid pro quo for the insurance industry in exchange for taking all comers. That looks to me like the most logical outcome for overturning the mandate—but my perspective is one of an insurance veteran not a Court expert.

The Obama firewall strategy is a smart strategy for two reasons. First, it leaves the rest of the health law standing. Second, losing the most popular part of the new law, the insurance reforms, leaves the administration with lots of political leverage later on to fix the bill. Ironically, the Court, in accepting the Obama arguments, would be overturning both the most unpopular element of the law as well as the most popular.

From a policy perspective, I would see fixing the law in the wake of losing just the the mandate an easy thing to do. In place of the individual mandate, I would suggest a provision that:
  • Has no mandate for any individual to buy insurance.
  • Allow individuals and families to be able to buy insurance at any time.
  • Upon purchase, everyone in the family would be covered under any of the plans available.
  • But, if the insurance were not purchased at any time the individual was newly eligible, any preexisting condition would not be covered for two years.
Such a solution would provide guaranteed insurability if the insurance was purchased when first offered, no mandate to buy, people could purchase at any time and be covered, other family members would not be penalized, and the insurance pool would be protected.

The policy fix is easy.

But politically, in the current hyperpartisan environment, the Republicans have no interest in helping the administration fix the Affordable Care Act. Until both sides are willing to work together on a comprehensive compromise on health reform, there will be no fixes.

What happens if the mandate falls, the Court leaves the insurance reforms in place, and the political paralysis continues?

New Jersey. That state has had insurance reform and no mandate for a number of years and it’s a mess—even more unaffordable rates and enormous anti-selection in the insurance market.

The lack of a mandate won’t hurt the larger already efficient employer market and it won’t help the already problematic small group market. The employer mandate for those with more than 50 employees would continue.

In the exchanges, where the ACA would provide good subsidies for the poor and near poor, there would likely be adequate spread of risk among these lower income groups in a completely voluntary market because the insurance is affordable. But higher insurance rates will mean the CBO’s estimates for the cost of the subsidies will be way off. Remember, the ACA’s subsidy system caps the cost for health insurance based upon income—higher insurance premiums mean higher federal costs.

Without a mandate and with the insurance reforms still in effect, the anti-selection would be most pronounced in the middleclass where the subsidies were always insufficient anyway.

What happens if the Court throws out the mandate as well as the insurance reforms? The insurance industry would get the benefit of many more customers because the subsidies would still be in place. But they would be healthy because the insurance underwriting and pre-existing condition provisions would remain. While the insurance industry would do well, the providers would still suffer the ACA's payment cuts and not have as many patients coming in with insurance cards as they expected—particularly the most sick and costly for them.

If the Court throws out the individual mandate, as well as perhaps the insurance reforms, the law would have to be fixed.

But the political environment would have to change markedly before Republicans and Democrats could come together on a comprehensive fix to the new law.

Tuesday, February 9, 2010

Wellpoint and Their “39%” Rate Increase

Wellpoint is getting killed in the press over a “39%” rate increase for their individual health insurance block in California.

HHS Secretary Sebelius has pointed to the Wellpoint individual rate increases demanding an explanation. The President even brought it up in his interview on Sunday. At a time Democrats are fond of calling insurance executives “villains” this story just adds more fuel to the fire.

No less than five reporters have called me in the last day asking me to explain it all.

Falling back on my industry experience it is probable:
  • The “39%” headline is anecdotally the biggest increase the press has found—the average is probably less albeit in the high 20% range.
  • This is likely driven by a combination of increasing medical cost trend, a bad economy, and anti-selection as healthier people disproportionately drop their coverage leaving a sicker group in the pool.
  • The rate increase is probably “defensible,” at least actuarially, based upon the actual experience in that block.
When the day is done this probably says more about why systemic health care reform is so critical than about any one company’s behavior. Last week we heard national health care spending skyrocketed to 17.3% of the economy. This is a real life example of what that macroeconomic statistic really means.

But I am not about to defend Wellpoint having been burned once. A few years ago Lisa Girion of the Los Angeles Times called me to say Wellpoint was retroactively rescinding health insurance policies for inadvertent and immaterial mistakes people had made on their health insurance applications. Falling back on my years of industry experience, I said that couldn’t be true—only the sleazy insurers pulled that sort of thing, Blue Cross of California would never do that.

Of course, Lisa was right and it was the beginning of the California rescission controversy. Not what I would call the best example of public relations at a time the country was debating the industry’s future.

So, what Wellpoint needs to do, and do yesterday, about these increases is to be transparent. Put all of the facts on the table.

Is this another symptom of a health care system run amuck or the actions of a “villainous” insurance company?

Just what is it that Wellpoint is waiting for?

****

Update

Perhaps this is what they were waiting for. Here's what happens when you stand there like a deer in the headlights and let events take over.

From the LA Times today:
Congress opened an investigation Tuesday into Anthem Blue Cross' rate increases in California as President Obama cited the company's premium hikes -- some as high as 39% -- in his bid to pass national healthcare legislation.

The House Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations announced they are examining the increases, which are set to take effect March 1. Anthem is the state's largest for-profit insurer and a unit of Indianapolis health insurance giant Wellpoint Inc.

Committee Chairman Rep. Henry Waxman (D-Beverly Hills) and subcommittee Chairman Rep. Bart Stupak (D-Mich) asked WellPoint's chief executive, Angela F. Braly, to appear at a Feb. 24 hearing of the subcommittee in Washington. They requested that she provide a detailed explanation of the reasons for the rate increases, which have enraged policyholders.

Monday, October 12, 2009

The Senate Finance Health Bill Has No Clothes

Readers of this blog know that I have lots of concerns for the Senate Finance health bill primarily because it does not so much represent health care reform as just an expensive entitlement expansion.

Readers also know the insurance lobby--AHIP--is not one of my favorite organizations.

But I will tell you the report by Pricewaterhouse Coopers (PwC) commissioned by the AHIP and released this morning is accurate. The Senate Finance bill would do nothing short of blowing up the insurance market.

You don't need to be Einstein or a PwC actuary to come to that conclusion. Common sense is all the credential you need.

Beginning in 2013, the Senate Finance bill would make uninsured individuals eligible for premium credits to buy a health policy. But those credits would leave these people far short of being able to really afford a health insurance policy. A family of four at 250% of poverty and making $55,000 a year ($52,000 is the median household income in the U.S.) would have to pay about $4,000 toward their premiums and that for a policy with a $1,000 deductible and a maximum of about $7,000 in out-of-pocket costs each year.

At 300% of poverty, $66,150, a family would be required to pay $8,000 in premium for a policy with a $3,000 deductible!

How many families making $55,000 a year or $66,000 a year do you know that could add this kind of expense to their annual budgets?

It is really no better for a family making 400% of poverty, or $88,200 a year. They would have to pay $10,600 a year in insurance premiums for that policy with a $3,000 deductible!

Senate Finance, knowing they could not enforce this kind of individual mandate to buy health insurance then set about to exempt many from paying a fine (if it costs more than 8% of income) or just gutting the fine if they did not buy the coverage.

In 2013, for example, there would be no fine for not having insurance. By 2014 the penalty would be $200 per adult and it would rise to $400 in 2015, $600 in 2016, and $750 by 2017.

But starting in 2013 the Senate Finance bill says that the insurance companies have to get rid of medical underwriting and pre-existing conditions provisions.

So in 2013, any consumer could simply go to the health insurance company and demand to be covered under any one of the mandated benefit plans. No medical underwriting before getting in and no pre-existing condition limitations. Just sign the application and go to the doctor.

In one sense you can understand the political logic here--the Democrats can't very well mandate middle class families to pony-up $4,000, or $8,000, or $10,000 out of their already challenged budgets. So they just found a way to exempt them or make the fine a tiny one.

But they left the insurance reforms in place.

Let me ask you a question. Why would any family buy health insurance under such a scheme?

I will suggest the answer is that they will buy it when they need it. No sooner. Even in 2017, a family with two adults would pay no more than a $1,500 annual fine against a premium that would be $4,000 to $10,000 a year in these middle class income brackets.

I'll give you another one. Why would any small employer provide health insurance?

I will suggest the answer to that one is the smart small employer will just cash-out any benefits they do provide today and tell the employee t0 pay the fine until they need it and then go to the exchange and get it (there is also no small employer mandate in the bill to provide coverage). The worker would likely be thousands of dollars ahead each year!

The problem the Democrats have here is that they are trying to get a health bill to cost under $1 trillion. That has made them back off on premium subsidies and policy benefits. They have had to back so far off that the Democratic proposals are not offering health insurance policies anything close to being affordable for middle class families.

The political response in Senate Finance has been to waive the individual mandates but keep the underwriting reforms.

The sum of it all is a health insurance market disaster in the making. In the business we refer to it as a "death spiral." Simply, the higher the premiums go the fewer that will buy, the sicker the pool, the higher the premiums go once again, even fewer people are left in the pool, and so on until all of the sick are in the pool and all of the healthy have left it.

The PwC report says that average family premiums of $12,300 today will rise to $25,900 under the Senate Finance proposals in 2019. They say premiums would be driven by these underwriting reforms, cost shifting from Medicare cuts, and new insurance taxes simply being passed through to consumers.

I don't know if the PwC report is exactly correct, but as to its conclusions regarding the gutting of the mandate to buy insurance and that insurance company taxes will be passed through to customers, common sense certainly takes one to about the same conclusion. Frankly, I thought it would be worse.

The Senate Finance Democrats could not have created a bigger insurance pool train wreck in the making than the one they have devised here.

What is really amazing is how all of these Senators sitting around that Senate Finance table have just sleep walked their way through all of this as if they don't have the common sense to figure this out on their own.

PwC Report

Monday, June 29, 2009

Will Eliminating Medical Underwriting and Merging the Small Group and Individual Market Into a New Insurance Exchange Work? Lessons From Massachusetts

Creating a universal system of health insurance is everyone’s objective. But even if we pass an expensive health care bill in 2009 we won’t achieve it. We just don’t have enough money to cover everyone. Maybe, in the most expensive proposals, we would make it possible for 90% to be covered. In others, far less.

The problem is that without an absolutely seamless system there will still be people outside the system and able to game it.

So, how do you balance the goal of giving everyone access to the health insurance system without letting others game it?

Massachusetts has merged the small group and individual health insurance markets and eliminated medical underwriting—people can buy insurance when they want to even though a good number, albeit far fewer than before, of the state’s citizens continue to be uninsured.

So what can we learn from their experience—particularly because most insurance exchange proposals here in Washington, DC look a lot like the Mass health care law?

Harvard Pilgrim’s CEO Charlie Baker has a very important post on his blog. When you read it, remember that Harvard Pilgrim, based in Massachusetts, is undoubtedly one of the really good guys in the American health care system. Their plans continue to score at the very top in service and quality among all the leading surveys and they are one of those community-based health plans that make less than 1% profit.

Here is a portion of his post:
Now here’s the costly wrinkle. When the merger occurred, the state told the health plans in Massachusetts that we could no longer apply a pre-ex exclusion or waiting period to individual purchasers unless we applied it to all purchasers in the merged market (including all small businesses). No one was willing to impose such a condition across the entire merged market - primarily because it would be unfair to small businesses to impose such a requirement. In the end, we all hoped that the new state requirement on individuals to have health insurance - or pay a tax penalty - would encourage healthy individuals to purchase insurance every year, and offset this now wide open front door for individual coverage.

Long story short, I don’t think it’s working. A few months ago, brokers started posting comments on this blog site that implied that people - and some brokers and employers - were gaming that wide open front door - purchasing health insurance for a few months at a time, using a lot of services, and then dropping their coverage. The penalty for not having coverage isn’t all that steep - about $900 - and while a few months of coverage might cost $2-3,000 in premiums - that’s peanuts compared to the cost of many medical services, which can run into thousands of dollars in a matter of days.

After about the fifth broker comment, I asked our finance people to check and see if individuals purchasing insurance from us either directly or through the state’s Connector web site were buying for a few months at a time, and using a lot of services. The results were astonishing. Between April of 2008 and March of 2009, about 40% of the people who purchased individual insurance from Harvard Pilgrim stayed covered by us for less than 5 months. Even more amazing, they incurred, on average, about $2,400 per person in monthly medical expenses - roughly 600% higher than what we would have expected. It wouldn’t surprise me if other health plans have the same problem.

This is a problem. It is raising the prices paid by individuals and small businesses who are doing the right thing by purchasing twelve months of health insurance, and it’s turning the whole notion of shared responsibility on its ear. It’s also created a new way for people who don’t want to play by the rules to avoid them. The state needs to reconsider its policy to eliminate waiting periods and/or pre-ex exemptions for individuals purchasing health insurance in the merged market. That would be the simplest and easiest way to protect individuals and small businesses who are playing by the rules - and limit the very costly impact of this wrinkle in health care reform.

You can read the entire post here.

Wednesday, June 17, 2009

The Dumbest Thing I have Ever Seen a Health Insurance Company Do––And Three of Them Took Their Turn Doing It in Front of the United States Congress

And, I’ve been in the business for 37 years.

First, let me stipulate we really need a system of universal care where everyone gets to have insurance. But we don’t yet so certain rules are unavoidable until we do.

Here are a few separate clips from today's Los Angeles Times article, "Health Insurers Refuse to Limit Rescission of Coverage:"
"Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.

"The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system."

"But they would not commit to limiting rescissions to only policyholders who intentionally lie or commit fraud to obtain coverage, a refusal that met with dismay from legislators on both sides of the political aisle."

"The executives -- Richard A. Collins, chief executive of UnitedHealth's Golden Rule Insurance Co.; Don Hamm, chief executive of Assurant Health and Brian Sassi, president of consumer business for WellPoint Inc., parent of Blue Cross of California -- were courteous and matter-of-fact in their testimony."

"The industry has tried very hard in this current effort not to be the bad guy, not to wear the black hat,' Begala said. 'The trouble is all that hard work and goodwill is at risk if in fact they are pursuing' such practices."

"But rescission victims testified that their policies were canceled for inadvertent omissions or honest mistakes about medical history on their applications. Rescission, they said, was about improving corporate profits rather than rooting out fraud."

"Late in the hearing, Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show 'intentional fraud."

"The answer from all three executives: 'No."
For those of you not versed in the details of medical underwriting, let me explain a few things.

Lying on your health insurance application is fraud and you can lose your insurance when you intentionally do it to gain coverage. That is good policy and basic to contract law. An example would be someone who went to the doctor because of severe headaches, didn’t disclose it when applying for insurance, and a short time after getting coverage was diagnosed with a brain tumor. Common sense would tell you not to withhold such information—particularly when the application makes you attest that you have revealed all.

But sometimes people forget to put things down. Let’s say you went to the doctor for a back problem onetime five years ago, didn’t put it down, and were diagnosed with diabetes a few months after your health insurance became effective.

It would be an inadvertent and non-material misstatement to sign your health insurance application having promised you told all but left something, that in the end did not matter, off of it. It is always important to be thorough and honest in filling out a health insurance application but sometimes we forget things.

In all the years I worked for an insurer—from underwriter to COO—we never penalized anyone for an inadvertent and immaterial misstatement. I never knew of a competitor who did either.

Why would you? How could you sleep at night knowing you retroactively canceled (or rescinded) a sick person’s health insurance because of something that really didn’t matter?

Fast forward to the California rescission controversy. A number of health insurers have been doing just that. More, they continue to defend it even in the face of California Insurance Department fines and plenty of lawsuits.

Then, they do it right in the middle of a national health care debate the day after the President of the United States flew to Chicago and told the American Medical Association private health insurers should have to compete with a public health plan that could well run them out of the business if it ever passed.

So here they sat in front of a Congressional Committee and were asked if they would stop retroactively canceling sick people’s health insurance—not for real fraud but—for inadvertent non-material reasons.

Representatives of the three companies each took their turn and said, “No.”

Two things.

I’ve brought a lot of good folks into this industry over the years. People who still need this to work so they can pay for their kids’ college education and fund their retirement plans.

This is the kind of corporate leadership they have to rely upon so that this industry can continue?

The current health care debate turns on who can best make our system work. My sense is that it will take the genius of individual creativity to separate the 70% of this health care system that is the best in the world from the 30% that is waste. Who can do the best job on that? Government? The private sector?

I believe the private sector.

And, this is the leadership I have to defend?

July 2008 post:State of California "Fearful" of Enforcing $1 Million Fine Against Wellpoint/Anthem Blue Cross for "Illegal" Health Insurance Policy Rescissions

February 2008 post: Health Insurance Industry "Racing to Defuse a Growing Furor Over Retroactive Policy Cancellations"

December 2007 post: California Insurers Lose a Big Court Case In the Health Insurance Policy Rescission Controversy

November 2007 post: Report: "Health Insurer Tied Bonuses to Dropping Sick Policyholders"

March 2007 post: California Fines Wellpoint $1 Million for "Unfairly" Rescinding Health Insurance Polices--Was Wellpoint Fair or Not?

Sunday, July 6, 2008

State of California "Fearful" of Enforcing $1 Million Fine Against Wellpoint/Anthem Blue Cross for "Illegal" Health Insurance Policy Rescissions

Crazy as it sounds an AP story on Thursday reported that the California Department of Managed Care "didn't even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because they feared they would be outgunned in court."

Last year the department announced that it would fine the insurer for improperly rescinding individual heath insurance policies in the midst of the California rescission controversy. Since then, most insurers have announced policy changes in the way they rescind coverage.

From the AP story:
The department's director, Cindy Ehnes, told The Associated Press on Thursday that the agency has had success in forcing smaller insurers to reinstate illegally canceled policies and pay fines, but Blue Cross is too powerful to take on.

"In each and every one of those rescissions, (Blue Cross has) the right to contest each, and that could tie us up in court forever," Ehnes said of the approximately 1,770 Blue Cross rescissions between Jan. 1, 2004, and now.
It's not like this issue hasn't already been decided in favor of consumers. Last December, a California appeals court decided that California insurers can't cancel a health policy unless the applicant "willfully" misrepresented their health status: California Insurers Lose a Big Court Case In the Health Insurance Policy Rescission Controversy

If California can't protect consumers, who can?

Wednesday, March 12, 2008

Democrats Ask GAO to Study the Individual Health Insurance Market--They Are Really Trying to Set Up McCain and Cast Doubt on His Health Reform Plan

There is an old salesman's axiom, "Don't ever ask a question you don't already know the answer to."

Key House Democrats have asked the Government Accountability Office (GAO) to take a look at the current state of the individual health insurance market. They also want the GAO to review the operation of the state high risk pools designed to provide a safety net for those who can't get coverage in the private market.

Democratic House Committee Chairmen Dingell, Waxman, and Pallone told the GAO, "The individual market for health insurance coverage is seriously flawed. Many people who need insurance and apply for it are denied coverage in the individual market or are offered insurance coverage that turns out to be inadequate or it is too expensive or both."

What's really going on here is that John McCain is offering a standard Republican prescription for health care reform--which includes the rebuilding of the health insurance market on an individual platform that would emphasize personal responsibility, consumer choice, individual ownership and portability of coverage. In short, McCain and the Republicans want to revitalize the individual health insurance market--often by deregulating it.

The Democratic response to that will be that McCain and the Republicans just want to throw you to the market wolves--an individual health insurance market that gives the best prices to the young and healthy and sends the sick off to government-run risk pools that fall way short of giving people decent coverage.

The problem for McCain is that is in fact how the individual health insurance market works today. The Republican nominee is going to have to tell the voters how his reinvigorated individual health insurance market will work better than that. So, far he is short on the details.

The Democrats are about to get themselves a report that will condemn the operation of the individual market and give the Democratic candidate for President a lot of ammunition against McCain.

Senator McCain would do well to close the loop on his proposal and tell us how the sicker and older will get a good health insurance policy in his new system.
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