Excluding preganancy from insurance risk pools
Los Angeles Times
August 18, 2004
State Bill Mandates Maternity Coverage
By Marc Lifsher
The measure by Sen. Jackie Speier (D-Hillsborough) would affect a relatively small number of Californians: the 354,000 who get their health insurance outside of employer-provided group plans and don’t buy maternity coverage.
Kaiser Permanente, the state’s largest healthcare provider, thinks maternity care should be part of any basic health service. Slightly smaller rival Blue Cross of California, a subsidiary of WellPoint Health Networks Inc., contends that getting pregnant is a choice and that outlawing the exclusion would drive up insurance costs.
Speier and her supporters say they want to protect women against discrimination and prevent insurance companies from exploiting a legal loophole by covering only certain medical conditions – a practice known as cherry-picking. (Federal law prohibits insurers from excluding maternity benefits from employer health plans, which cover 97% of Californians who have health insurance.)
“If you’re going to tailor healthcare to the individual . everybody’s costs would skyrocket,” Speier said. “The reason that healthcare works now is because we spread the risks over the entire population.”
Although (Gov. Schwarzenegger) hasn’t taken an official position, his insurance advisor, Scott K. Reid, wrote a letter to Speier opposing the bill. “This bill would limit choice in the marketplace and increase costs for consumers who desire a lower-cost insurance product that excludes maternity coverage,” he said.
http://www.latimes.com/business/la-fi-maternity18aug18,1,2163960.story?coll=la-home-business
Comment: Customizing insurance coverage by allowing shoppers to choose from a menu of options for coverage would reduce costs for those who likely would not need the services declined. But for those who are clustered with individuals who have greater specific needs, the costs of the segregated pools would be significantly higher and unaffordable for many. An equitable insurance pool shifts costs from those with greater needs and dilutes those costs amongst the greater number of individuals with much more modest needs.
Segregating higher cost individuals into separate pools is irrational, but assessing financial penalties on pregnant women is inhumane. We should establish our own equitably-funded universal insurance pool and tell Blue Cross/WellPoint to get lost.