Sunday, April 18, 2010

It's Too Late, Baby, pt 2

According to the NY Times, when government requires insurers to cover all comers, regardless of their medical condition, the cost of premiums will skyrocket. Which of the 50 laboratories of democracy has endured this phenomenon? New York State! And The Times is just now getting around to learning this? New York an Insurance Lab On Skyrocketing Rates

New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patients’ advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart.

The problem stems in part from the state’s high medical costs and in part from its stringent requirements for insurance companies in the individual and small group market. In 1993, motivated by stories of suffering AIDSpatients, the state became one of the first to require insurers to extend individual or small group coverage to anyone with pre-existing illnesses.

New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.

The Times then makes a point last heard coming from the racist hateful mouths of talk radio, Tea Party attendants and right-wing blogs: the healthy people stop paying premiums, thus driving up costs even more! Whodathunk it? It sure would have been nice if this had been part of the public debate prior to the passage of Obamacare:

Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where many of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the “adverse selection death spiral.”

I love the term "adverse selection death spiral."As if a phenomenon doesn't exist unless it has some bloodless term for wonks to use.

“You have a mandate that’s accessible in theory, but not in practice, because it’s too expensive,” said Mark P. Scherzer, a consumer lawyer and counsel to New Yorkers for Accessible Health Coverage, an advocacy group. “What you get left clinging to the life raft is the population that tends to have pretty high health needs.”

Since 2001, the number of people who bought comprehensive individual policies through HMOs in New York has plummeted to about 31,000 from about 128,000, according to the State Insurance Department.

At the same time, New York has the highest average annual premiums for individual policies: $6,630 for single people and $13,296 for families in mid-2009, more than double the nationwide average, according to America’s Health Insurance Plans, an industry group.

The high school graduates attending tea parties understand all of this instinctively. The Ivy League Dems who have been pushing health care reform know it too. They run the damn government in New York! (not to mention, many of them live there). Yet, they - along with their media enablers - were happy to ignore these inconvenient facts until after Obamacare passed. Thanks a lot for nothing.

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