Individual Health Insurance Consumers Left With Few Options
By Denise Reynolds
Health insurers across the country are dramatically increasing rates and slashing benefits for many of the 17 million consumers who have individual insurance policies. The issue is being addressed by the President, as he attempts to create an affordable insurance package in his overhaul of healthcare in the United States.
Anthem Blue Cross Blue Shield in California, for example, has announced a rate increase of 39 to 60%. Currently, however, consumers have very little option except to pay the increase or drop coverage as affordable options are few.
Consumers choose individual insurance policies when they are unable to obtain group insurance through an employer. Individual plans have different rates, depending upon the customer’s age, state of health, and location.
Health and Human Services Secretary Kathleen Sebelius and other members of Congress have released a report that has drawn attention to the insurance rate hikes in several states besides California, including Maine, Oregon, Michigan, and Connecticut. She criticizes the insurers saying that they are putting profits ahead of customers who must buy the individual policies.
Next week, state and federal officials will conduct public hearings into Anthem’s impending increases, which are due to take effect on May 1, 2010. Senator Dianne Feinstein of California announced Friday that she intends to introduce legislation to expand federal authority over health insurance premiums. The proposed bill would create a “Medical Insurance Rate Authority” under the Health and Human Services Secretary.
The insurance companies overall agree with the need to fix health insurance problems. They say that the rate hikes are due to factors beyond their control, such as the soaring cost of medical care and the increased turnover of customers who move to other markets due to employer contracts or unemployment. WellPoint spokesperson Brian Sassi says, “At the end of the year, when all things were said and done, premiums were insufficient to cover the claim costs that we actually paid out.”
Some insurers have actually started a strict selection process in an effort to control costs – either charging those with health conditions higher premiums or opting not to extend coverage. Some states, including New York and New Jersey, have laws against this practice and are required to sell policies to all buyers, regardless of pre-existing conditions.
Representative Henry Waxman of California, who chairs the House Energy and Commerce Committee, says “This once again underscores the need for Congress to pass a comprehensive health-care reform so that Americans have access to affordable health care and are protected from abusive insurance company practices.”
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Some individual subscribers facing tough times (but in good health) will decide to temporary go without coverage as a calculated risk. When enough do this, you have a death spiral, as the only people who will stay in the insurance plans are those with high medical expenses. Simple economic game theory (once you factor in correlation of negative effects) leads to this result; competition across state lines doesn't affect the calculations whatsoever.
I'm not actually in favor of the proposed legislation (it seems too complex -- making regulatory capture inevitable -- I'd rather a simpler bill including a public option). But something like it is the only realistic way to address the individual subscriber scenario. And we're already providing unfunded socialized coverage by demanding that hospitals not let people die outright due to lack of medical coverage.
Personally -- I have coverage via my employer and don't expect that to change. If other Americans can't use their own heads long enough to understand how reform is needed, y'all deserve the mess you make.
Eventually we'll have either more primitive health care (what those who look back on an agrarian past with nostalgia seem to desire), or health insurance reform as other first world countries have done.
Please don't deconstruct to the point of the absurd. I didn't say that competition alone would solve the health care debacle. It is just one of many potential changes that can be used. Competition drives down cost...period. Severe anti-trust legislation prevents collusion among insurance companies and cost fixing. The cost of your insurance and the associated Health Saving Account become immediate tax credits to lessen your tax burden; not a deduction, full tax credit. Allow holders of insurance to vote for the administrators of the insurance policy and vote on compensation for that administrator. Thus performance and customer satisfaction dictates the salary. Remove the responsibility of the physician to gain payment from the insurance company; it is not their responsibility, it is yours. Then they will not have to hire an army of people to deal with insurance issues which in turn raises their individual overhead and costs you more to receive care. National TORT reform. Period. It's been too long and it is ridiculous.
So the incentive is to buy insurance so you pay LESS tax at the end of the year.
Also, the responsibility lies with the individual as it should have been all along instead of the Nanny.
I could go on as the ideas as as long as my arm, but I don't need 3000 pages to describe them and I am not a labor union ideologue looking to line my pockets with your money.
Common sense.....look it up and get on board.
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