Health Reform Policy Update
Harry Reid: “We are going to have a public option before this bill goes to the president’s desk.”
Frist corrects the record: He’s against the Baucus bill.
Health Care Policy and Reform Insights | NCPA
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Recognition and Awards
I couldn’t find anything in the Post article that would suggest a ban underwriting would make discrimination worse than at present. What form of discrimination is worse than underwriting?
Marketing practices seem to me to be a non-issue. If all insurers market to young and healthy people, then the net effect should be no differentiation. Besides, the old and sick already know they need coverage.
As far as post-sale practices go, insurers have nearly the same incentive to cut corners with, say, a cancer patient whether that patient is paying $200 per month or $1000, if the actual outlay is $20,000. So I expect many of these cost management practices to be already present with underwritten insurance, and certainly with employer-sponsored insurance. How do we deal with them today?
If there really is a difference between underwritten and non-underwritten insurance practices, they should already be apparent when comparing individually-purchased and employer-provided coverage. The only change I expect to see in insurance products offered to the public is that they will grow to resemble existing employer-provided plans.
If insurers cannot charge premiums that reflect risk, they will find ways to avoid attracting unhealthy people. Anything they could do make their plan unappealing to sick people is a way to encourage favorable selection. This might include free health club memberships to attract marathon runners, while not including any doctors in their network known for treating chronic diseases.
Free health club memberships would be an interesting way for insurers to promote a healthy lifestyle.
But again, can you point to practices like this in employer-sponsored plans or in New York or New Jersey private plans?
Do individual plans with guaranteed renewal clauses restrict access to chronic disease specialists, as a way to get rid of long-time customers whose health has declined since they were first underwritten, and who no longer pull their own weight?
I have no doubt that such incentives for selection will exist, but if they are likely to result in the practices mentioned to any great degree, then it should already be possible to demonstrate this in the majority of health plans sold in the U.S. today.
Sorry to see the Terminator cave. Ditto for Tommy Thompson.
We see some evidence of this in the FEHBP — where health plans are highly subsidized. This is less likely to occur in the individual market simply because healthy individual are unlikely to be induced to pay inflated premiums when they can merely wait until they become sick to enroll. If there is penalty for not having insurance (and rates are banded in some way), I would expect more of this covert cherry picking to occur.