The Bush health care plan's problem and the real world
If you want to know why the Bush health care plan will not work, you need look no further than the individual insurance cancellation brouhaha in California.
Blue Cross of California and other carriers stand accused of combing through high cost members' application forms to find any mistake, inadvertent or not, and then using that to cancel their coverage.
While Blue Cross' practice (which they have admitted) is reprehensible, it's also understandable in today's dysfunctional insurance market.
Insurance companies work very hard to not cover anyone with a current or past health care condition that may at some point in the future lead to claims. They are not purposely being bad; if they cover everyone their competitors won't, they will soon find themselves bankrupt. Moreover, the individual insurance companies are "insurance" companies - and insurance is the spreading of unforeseen risks among a large number of policyholders.
Anyone with a pre-existing condition does not belong in a pool of those with no pre-ex conditions.
But they still need health care and a mechanism to fairly pay for same.
And therein lies the problem with Bush health care. His plan seeks to use the insurance markets and tax policy to reduce the number of uninsureds, who will use tax credits to fund their new insurance plans.
Except no one will sell them a plan if they have a pre-existing condition.
I am not in any way defending what the California health plans are doing, according to regulators the plans are illegally terminating coverage based on technicalities. When you understand the market and the factors determining success, the health plans' activities are entirely logical.
Instead of paying regulators to police bad actors, we should incent/motivate health plans to devote their considerable resources to improving and maintaining the health of their members.
If we don't, then no plan will make any appreciable dent in the number of uninsured.
Comments
The problem is "GREED" the health insurance industry will do anything to drive up their stock price, so they adopt stretegies to do this. People's health is NOT a comondity, these people are evil!
Posted by: insurance executives are lowlifes | February 24, 2007 12:21 AM