Failing grades for individual health insurance market
Posted by Don McCanne MD on Monday, Jul 7, 2008This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Failing Grades: State Consumer Protections in the Individual Health Insurance Market
Families USA
June 2008Key Findings
- Only five states prohibit all insurance companies from cherry-picking the healthiest consumers and excluding everyone else.
- In 35 states and the District of Columbia, there are no limits on how much insurers can vary premiums based on health status. An additional six states have limits that still allow dramatic variations in premiums.
- In 21 states and the District of Columbia, insurers can exclude coverage for pre-existing conditions for more than one year. In eight of those states and the District of Columbia, insurers can exclude coverage for pre-existing conditions for the duration of an individual’s policy.
- In 20 states and the District of Columbia, insurers can set and raise premiums without adequate oversight.
- In 45 states and the District of Columbia, insurers can spend less than 75 cents of every premium dollar on medical services.
- Insurers in 29 states and the District of Columbia are allowed to look at a policyholder’s medical history and perform medical underwriting months, or even years, after they issued the policy.
- In 44 states and the District of Columbia, insurers can revoke an individual’s health insurance policy without advance review by the state.
Most of the politicians are telling us that national health insurance is not politically feasible. They tell us that we should not abandon what is already working well for us: the private insurance industry. They tell us that they would improve the private insurance market so that health plans would become affordable for all of us while still providing us with the protection that we need.
Looking at this Families USA report card of private plans in the individual market, it is clear that the private insurance utopia that they envision does not exist. Because of the lax regulatory requirements in far too many states, the insurers have been able to dodge their responsibility to cover everyone regardless of their health care needs.
So what kind of improvement in the insurance market are the politicians proposing?
Sen. McCain would further relax the regulatory oversight which would result in some insurance products with lower premiums, but at the cost of reducing even further the inadequate consumer protections we have. Being able to afford health insurance is of almost no value if it makes health care itself even less affordable.
Sen. Obama would close many of the insurance loopholes noted in this report by increasing the regulatory oversight of this industry. What would happen to insurance premiums if you required the plans to include everyone regardless of needs, and required them to provide benefits comprehensive enough to prevent financial hardship? Sen. Obama certainly knows, and this is why he says that we cannot require each individual to purchase insurance until he has made the plans affordable. Merely wishing that you could make comprehensive private plans affordable will never make it happen.
Numerous simulations and the experience of other nations have proven that using private health plans to provide reasonably comprehensive coverage for everyone is by far the most expensive method of financing health care. Looking at the Families USA report card, you can imagine how expensive it would be to bring our coverage up to a passing grade level. A single payer national health program would be less expensive and much more efficient. Why would a more expensive model that isn’t working for us be considered to be more feasible than a less expensive model that would?
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Teresa Ast
July 20th, 2008 at 12:10 am
We have just cancelled our health care. We are appalled at the health care industry for their prices. Since my husband is a self employed driver and I work for a company that has no benefits (more companies are cancelling their benefits due to the rising cost) we can no longer afford it. The prices for self employed individuals is the full price of the prmium which for a family of four (full coverage) is on the average over $1100.00 dollars a month. That is $13,200.00 a year in premiums. The total of our doctors visits and emergency room visits for the past two three years has only been $2,147.00 )paid out of our pocket on top of our premiums due to high deductible we had to elect). Therefore the health care system received $13,200.00 free and clear and it did us no good. There is something very wrong with this picture. And the fact that neither politacl party Democrat or Republican will do anything about it is absolutely embarrasing. I have not bee able to getr any answer other than “we are so sorry but cannot do anything else. Since i also worked for a hospital in collections, I was able to see the amounts that were charged (overchargedO to individuals and the way that hospitals collect that I became very disgusted with the whole system. It seems to be so corrupt. How can a hospital write off so much debt (homeless, medicare, medicaid and no health care at all but still give bonus checks to the employees?????? When is the government going to realize that this would help a candidate for the presidency if they really cared about the health care (or at least understood how important it is) to present a system that would work for everyone?