On Sat, Jul 18, 2009 at 11:35 AM, Dan M<dsummersmi...@comcast.net> wrote:
> Agreed. But, where he and I agree and where a John would disagree is that a > free market can be shaped by the laws within which it resides. For example, > if you required insurance companies to accept pre-existing conditions, you > would get rid of one of the major problems with the present system. The problem is that the laws always have unforseen consequences, and usually cause far more problems than they solve. The system is simply too complicated for a few politicians and technocrats to centrally control. Some states have "guaranteed issue" mandates that do just as you say above: http://www.ncpa.org/pub/ba558 | A 25-year old male in good health could purchase a policy for $960 a | year in Kentucky. That policy would cost about $5,880 in New Jersey. | A policy priced at $1,692 in Iowa and $2,664 in Washington State would | cost $4,032 in Massachusetts. | Firms in each state are protected from interstate competition by the | federal McCarran-Ferguson Act (1945), which grants states the right to | regulate health plans within their borders. | There are approximately 1,843 state mandates, according to the Council | for Affordable Health Insurance, an industry trade group. Some estimates | suggest these mandates have priced as many as one-quarter of the | uninsured out of the market. | Guaranteed issue means that any insurance company offering policies | must sell coverage to all applicants who qualify, regardless of medical | condition. While this sounds like it protects consumers, it actually | harms them by driving up prices. When insurance companies are forced to | accept all applicants, they raise premiums to guard against losses. As a | result, insurance is a poor value for everyone except those with serious | health conditions, and people often wait until they become sick to buy | it. Subsequently, business dwindles, insurers leave the market and rates | go up as competition diminishes. This has happened in all states that | require guaranteed issue. | Community rating means that an insurer cannot adjust its premiums to | reflect the individual health risk of consumers. While this regulation | achieves a level premium for everyone, in reality, healthy people | are charged more than they otherwise would be and sick people are | charged less. Therefore, the majority who are healthy see their premiums | rise. As Figure I shows, a plan for a healthy 25-year old male costs | six times more in New Jersey than in Kentucky, largely due to community | rating. Because of the higher cost, younger (or low-income) individuals | with few health problems tend to drop insurance, leaving an increasingly | unhealthy risk pool. This drives premiums ever higher - and fewer and | fewer people can afford coverage. _______________________________________________ http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com
