Constitutional Limits on Federal Power, Buying Insurance Across State Lines, and the Wasted Money on Disease Management

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  1. DMRationalist says:

    The problem with “standard” DM lies in paying high-priced professionals to perform telemarketing services to enroll (“engage”) patients in programs well past the time they are needed. Most hang-up. The willing have already found the services they need.

    Highly-automated systems that notify patients trusted advisors (e.g., physicians) of care gaps can have a high impact with a relatively low cost.

  2. Bart Ingles says:

    It would be more accurate to say that New York’s approach to guaranteed issue and community rating have caused its market to shrink. Employer-sponsored insurance is community rated and guaranteed issue (with reasonable limits) but hasn’t shrunk much.

    Of course the bills in Congress most resemble New York.

  3. Devon Herrick says:

    Prevention & Wellness programs and disease management both face the same obstacles. That is the need to efficiently identify and engage only those selected individuals who can benefit (and are willing) to modify behaviors sufficient to improve their health. And this all has to be done- at a cost less than the savings derived from providing fewer medical interventions.

    Health information technology has the potential to make this task easier and cheaper. However, people need an incentive to participate.

    Amazingly, federal law is a major barrier to implementing programs that require workers to modify their behaviors or face the (financial) consequences.

  4. Larry C. says:

    It would be a huge breakthrough if Georgia passed a law allowing Georgians to purchase insurance licensed in other states.

  5. Bruce says:

    Run him for Congress. He would fit right in.

  6. artk says:

    Just for fun, I decided to check if the Reason magazine article about guaranteed issue in New York State was correct. The statistics quoted are a lie! According to Kaiser, the individual insured rate in NY State is 4.5%, not 0.4% as stated in the article. That compares favorably with the national average of 5.3%. Guaranteed issue does mean that coverage for the younger, lower risk population cost more. It also means that the older, higher risk population can get affordable coverage. Remember, every younger lower risk insured is one illness and a few years away from the high risk pool.

  7. Linda Gorman says:


    The Kaiser table you point to gives the percentage of individual policies issued in the state. This is not, however, the individual insurance market in which private companies offer a choice of private policies that Reason means when it talks about the individual insurance market.

    The guaranteed issue regulations in New York (and Massachusetts and New Jersey) have made it virtually impossible for private companies to offer the individual medically underwritten policies that are routinely available in other states at anything like a reasonable cost. The reason is that if an insurer has to issue a policy, only people facing large medical bills will purchase one.

    In New York, a large number of the individual policies that the Kaiser table shows are probably issued through the regional HMOs that are underwritten by the state. The same thing has happened in Massachusetts, where most of the individual policies that aren’t provided by employers are bought through the HMO type plans offered by the Commonwealth Connector.

  8. artk says:

    re: “only people facing large medical bills will purchase one” That’s why successful universal care systems based in private insurance, ie Switzerland, include a mandate. As I said, we’re all one illness away from the high risk group.

  9. Linda Gorman says:


    Obviously a lot of people purchase health insurance before they get sick–26.7 million people purchased their own medical insurance in 2007 according to Census figures, and most of that was probably medically underwritten. This means that the people buying it weren’t sick when they purchased it.

    Some people in the U.S. don’t need health insurance. They have little in the way of accumulated assets to protect, and would be retroactively eligible for public programs if they need expensive health care. It isn’t rational for them to purchase health insurance so it would be cruel to make them do so either directly or via the reduced wages created by an employer mandate. Others don’t need health insurance because they have the assets to purchase health care directly.

    Aside from the fact that mandates are a philosophical abridgement of individual rights, it is impossible to point to a system where they work. Both Massachusetts and the Swiss system are coming apart as a number of posts on this blog have pointed out. Why imitate something that is failing unless one’s policy has the primary aim of simply telling people to do what one wants them to do whether or not it makes them better off?

  10. Bart Ingles says:

    I notice you haven’t commented on the Anthem rate hike situation in California yet. Apparently medical underwriting is no guarantee that healthy subscribers won’t abandon the system.

    The only explanation I can find for the collapse is that because of guaranteed renewal, over time the policies no longer reflected risk.

    I don’t see how underwritten coverage can be sustainable if you can’t increase members’ premiums whenever their risks increase. Otherwise, what stops the healthy members from periodically jumping ship, shopping for completely new coverage that doesn’t yet have any high-risk subscribers?

  11. Linda Gorman says:


    The Wall Street Journal has reported that the hike is caused by new California regulations that made it illegal for insurers to cancel COBRA policies once COBRA ran out. This fed a substantially different type of person into the individual market, one that hadn’t been medically underwritten. Losses were mounting, so rates went up on everyone in the individual market.