Costly Regulations Hammer Young New Yorkers
An article in the New York Times describes the plight of young, uninsured adults, some of whom are turning to self-diagnoses and self-treatment to avoid costly care. Overlooked in the article is the fact that the problem is largely caused by state insurance regulations. Although the average monthly premium in New York is about $900, the comparable figure in Texas is $200. The reason for the difference? Costly regulations, such as guaranteed issue and community rating – which overcharge young adults to subsidize older, less healthy New Yorkers.
I’d thought that Gov. Paterson was pretty reasonable, but his proposed solution to this problem was utter nonsense. A better solution would be risk segmentation by age and sex, and then we can quibble from there.
Didn’t New Jersey recently adopt age-banding?
Most states allow medical underwriting in the individual market. This allows for the more accurate pricing of risk and that means that individuals will face premiums that reflect the expected cost they bring to the insurance pool when they enroll.
Usually these states set up risk pools for people who are denied insurance because of a pre-existing condition.
Larry, my assumption was that community rating was the political reality for New York. Sorry I didn’t say so explicitly.
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