Thursday, March 25, 2010

When Congress Commits Malpractice... Can We Sue?

In order to fix the “Health Care Crisis,” the House passed legislation on Sunday which outlaws sound health insurance underwriting practices; if they don't immediately follow that by repealing the laws of Economics we're all pretty much screwed! Healthcare reform, as passed, will transform the Health Insurance industry from one where companies assess medical risk and price their products based on that assessment into one that merely processes payments, leaving it to collect what will be an ever shrinking pool of premiums while confronting the inevitable explosion in cost that subsidized health care, our newest entitlement program, will lead to.

According to the Democratic Policy Committee's website, as of 2014 the bill does the following:

Implements strong health insurance reforms that prohibit insurance companies from engaging in discriminatory practices that enable them to refuse to sell or renew policies due to an individual’s health status. Insurers can no longer exclude coverage for treatments based on pre-existing health conditions. It also limits the ability of insurance companies to charge higher rates due to heath status, gender, or other factors. Premiums can vary only on age (no more than 3:1), geography, family size, and tobacco use.

Sounds good doesn't it? Yes, but there's just one enormous little problem with it. All insurance has one universal characteristic that defines it as insurance; it is the current pooling of resources to protect against a potential future risk. Absent this characteristic, insurance ceases to be insurance, and is instead merely a pool of money used to pay current medical bills.

Recent articles that suggest that reform will turn Health Insurers into a regulated industry, much like the Electric utilities, miss the mark completely. Is your monthly electric bill the same as your neighbor's regardless of how much power you consume? I'll bet the answer is no. You pay only for the power you currently use, and that's not insurance.

Healthcare reform, as enacted, will force insurers to take all comers while at the same time limiting their ability to charge premiums that are appropriate for the risk involved in providing coverage. This will raise the cost of insurance for healthy premium payers as it has done wherever community rating is the law of the land. If you can buy health insurance after you become ill, why would anyone pay premiums until then? The answer; they wouldn't unless the government fine was higher than their premium. In other words, the government's $695 per year fine for those who don't buy mandated health insurance is a just a sick joke!

When only sick people pay premiums that are less than the cost of their treatment, how long will it be before the bankrupted health insurance companies are added to our growing list of tax payer owned and funded not for profit businesses?

Making health care treatment available to those who can't afford it should be one of our nations priorities but this giant Rube Goldberg of a system they are creating surely isn't the right way to go about it.


1 comment:

Anonymous said...

.....and if the private insurance model is destroyed by the policies in this new "law of the land", doesn't this lead to a government provided single-payer system? EXACTLY - and this is the Trojan Horse in this bill that the media and this administration won't report. Pass the vodka, Komrades!