The insurer is home free; it doesn’t have to cover someone on whom it might lose money. (A pretty sweet deal!) The industry palms the bad risks onto the state and keeps the good ones for itself. Apparently that’s how AHIP expects to achieve universal access to coverage. It wouldn’t be surprising if McCain, whose own plan seems vague, will look to AHIP for advice. All in all, a pretty good story.
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Nice reporting on McCain's proposal.
A week or two ago, I noticed the items you are pointing out about McCain's proposal, and I in fact am alarmed about my own, and every middle-class-person's financial security if McCain is elected and gets his Health Insurance plan through.
As you more or less point out, McCain, by allowing insurance to be bought across state lines, is causing a MELTDOWN of statewise protections.
In particular, NY, NJ, MA, VT, ME have pure- or modified- community rating, and so people in those states who responsibly attempt to maintain health insurance continuously but wind up with a pre-existing condition may face unbounded rates (say at a point when they lose empoyer-provided insurance), as only healthy people buy cheaper insurance out of state and destroy the pooling of risk. I live in one of these states, NY, and am frightened to death of what McCain proposes.
Further, 26 states have high-risk-pools that are funded through assessments on non-high-risk-pool policies. Again, as the funding mechanism is destroyed by healthy people purchasing policies out of state from states with no assessment for a high risk pool, the cost can rise without bound for people with pre-existing conditions on these already very expensive high-risk-pool policies.
I am inclined, therefore, to actually characterize the McCain proposal as a DEREGULATORY MELTDOWN, quite parallel to the recent financial deregulatory meltdown.
(For those interested, I've actually done some looking into this meltdown issue, and the state-specific situation with pre-existing conditions, posted at: http://www.nastechservices.com/HealthInsuranceUSAPolicy.html )
Posted by Norm Spier on Thu 16 Oct 2008 at 09:37 PM