Real Reform
The Manhattan Institute has published a study by Steve Parente and Tarren Bragdon. An op-ed by Paul Howard summarizes the results:
Repealing New York’s current community rating and guaranteed issue laws “would lower premiums and help as many as 37 percent of the uninsured there to buy private, unsubsidized coverage. It would also help reserve scarce tax dollars for the poorest and sickest New Yorkers.”
When combined with other reforms such as buying coverage across the state line in Connecticut and Pennsylvania and reducing the mandated benefits in New York, costs would be lowered by 24% and 18% respectively.
The mot dysfunctional insurance markets in the country are in New York, New Jersey and Massachusetts. Yet, these states are held up as models for the rest of the country. New York doesn’t have a “risk pool”. Rather it has a “sick pool” — because the only people who find high-priced insurance to be a good buy are those with high health care costs. Premiums are so high because healthy young people refuse to pay the same premiums as older, less-healthy people. Besides, people can wait until they become sick to join the plan?
Didn’t New Jersey recently switch to modified (3.5:1) community rating? What effect has this had? It seems to me that with a suitable tax credit this could be nearly on par with employer-sponsored insurance.
I wonder if some recently published New Jersey statistics are still looking at previous rules.
“Reform” means pricing people out of the market.
You can look at individual rates on the NJ Division of Insurance website. An adult under 25 years old can get a standard plan with a $5,000 deductible plan with no network for $870 a month with BCBS. Prices go up from there.
Plans are like nothing sold in the rest of the world. The price quoted is for 50% payment
I just noticed that the $870 plan is not age-banded. It’s the same price for 65 and older. I can’t believe that they’ve ever sold such a policy to anyone under 60.
Strange that there would be a mix of modified- and pure-community rating plans offered. I would expect any young person to consider only age-banded plans.
It looks like the PPO offerings for under-25 are in the $250-$400 range, depending on whether you want 50% or 20% co-pays. This is still considerably higher than I’ve come to expect for employer-sponsored coverage, but it’s not as outrageous as $870.