Mark Hannay, Director, Metro New York Health Care for All Campaign:
“The author of the latest Kaiser Family Foundation study re: the private individual health insurance market (Karen Pollitz) did a briefing for legislative staff here in NY (Albany) last week, and showed that while you are right, a universal public program is ultimately the only long-term solution, in the shorter-term, there are steps states can take to stabilize and make their individual markets work successfully to some degree. These include: community rating, guaranteed issue, standardized comprehensive products, re-insurance & risk-sharing/adjustment mechanisms, public subsidies to insurers who end up with a disproportionate share of high-cost people, and not allowing opt-outs for special categories of individuals (e.g., sole proprietors into the small group market) but rather keeping the market whole as much as possible.
“In fact, NY is one of the few (only?) states to have taken these various steps, and as a consequence, unlike in the states she looked at, ALL the persons profiled in her study would be able to get comprehensive coverage without having to pay more or suffer a loss in benefits in NY. However, they would still have to pay high premiums of $4,000+ annually for individuals (more than double that for families), which is a never-ending battle — this year the average rate increases in NY so far are 20-30%+, with some rates going up as much as 75+%!
“In NY, most of our ‘reforms’ were fought against the initial opposition of the insurance industry, who were neutralized once we assured them that they’d not be put at an undue disadvantage and the state would help them shoulder the burden. After all, this market is disproportionately comprised of high-volume health care users (i.e., the chronically ill and disabled) who buy in this market because they MUST have this coverage to literally survive and often have no other alternatives, and so they scrape the pennies together somehow because it is THE most expensive way to buy insurance.
“All this is by way of saying that there are things which can be done to somewhat alleviate the crisis for people in the individual market, but clearly a long-term systemic solution is called for (i.e., universal health care.) If you want to see what’s coming down the road for the rest of us as the American health care system continues to collapse, take a look at the individual market in most states. The modus operandi? Once you get sick and need coverage which you will actually use, you either can’t get it at all, or can’t get it for what you need it for, and you’ll pay through the nose regardless.
“Makes sense huh? Kick ’em while they’re down!”
For the full KFF report:
Comment: Mark has pointed out the fact that a tightly regulated insurance market, as in Albany, has the distinct advantage of assuring the theoretical availability of coverage for everyone. The crucial tradeoff is that the very high premiums that result create significant financial barriers to coverage for young and healthy consumers, along with everyone else. Once again this demonstrates the pressing need to eliminate the waste of our private health plan bureaucracies, to pay for health care in a fair and just manner through progressive funding, and to contain costs through mechanisms that improve the allocation of our health care dollars. Mark has shown us that application of rational health policies in our current health care market still fails to address the issue of affordability, and that there is no way to escape the reality that we really do need publicly administered, universal health insurance. We are getting closer to a rational system, and some day we’ll get it right.