The Unraveling of Health Insurance
Consumer Reports
July, 2002
"New health-insurance policies that increase employees' responsibility for costs could ultimately result in shrinking coverage for insured people. Instead of bringing people into one gigantic pool where the risk is spread evenly, market-driven policies further fragment the system. Just as the young, in effect, subsidize Social Security for the old, the healthy have traditionally subsidized health-insurance costs for the sick or injured so that no one is clobbered by huge bills. Consumers Union does not support replacing Social Security with self-directed savings accounts, nor does it support undermining health insurance with personal health accounts."
"With no viable solutions in sight... "
Comment: Personal health accounts are the insurance industry's response to medical savings accounts. They will have appeal for the young and healthy who can watch their accounts grow, and they will be a disaster for those with significant medical needs who will rapidly spend down their accounts and be left with inadequate PPO or EPO catastrophic coverage.
Consumers Union recommends budgeting for health care expenses even if you think you have good insurance. Because insurance companies are shifting risk to the beneficiaries, any significant medical problem can leave you financially strapped.
Formerly, health insurance provided security that would allow you to build financial reserves for other needs such as supplementing Social Security at retirement. Now, the insurance industry is using your financial reserves to provide them with security against losses in the event that you would require health care. And for that non-service, we pay them close to a couple hundred billion dollars. Why do the incrementalists insist that we protect this industry, especially at the cost of perpetuating profoundly inhumane health care injustice?