Insurers To Waive Higher Pre-Existing Conditions Premiums?
By Justin Gardner | Related entries in Health Care
Looks like all of this talk about health reform has put the industry on notice…but the only stipulation here is everybody has to be in the system.
WASHINGTON -The health insurance industry offered Tuesday for the first time to curb its controversial practice of charging higher premiums to people with a history of medical problems.The offer from America’s Health Insurance Plans and the Blue Cross and Blue Shield Association is a potentially significant shift in the debate over reforming the nation’s health care system to rein in costs and cover an estimated 48 million uninsured people. It was contained in a letter to key senators.
In the letter, the two insurance industry groups said their members are willing to “phase out the practice of varying premiums based on health status in the individual market” if all Americans are required to get coverage.
“The offer here is to transition away from risk rating, which is one of the things that makes life hell for real people,” said health economist Len Nichols of the New America Foundation public policy center. “They have never in their history offered to give up risk rating.”
So why this move now?
Well, as mentioned, it’s the pressure created by Obama’s budget initiatives. Because what these companies are ultimately worried about is the government creating a subsidized system for those not insured that can compete with private interests. That’s why they’re trying to make that seem less appealing before it even gets started.
Also, the insurance companies aren’t completely leveling the playing field…
The companies left themselves several outs, however. The letter said they would still charge different premiums based on such factors as age, place of residence, family size and benefits package.And importantly, the industry did not extend to small businesses their offer to stop charging the sick higher premiums. Small employers who offer coverage can see their premiums zoom up from one year to the next, even if just one worker or family member gets seriously ill.
No doubt they’re trying to offer just a little bit at a time instead of giving away all of their leverage because they’re betting that this budget will get cut back significantly and Republicans can use these plans as ways the free market has solved the uninsured problem. At least that’s my guess.
More as it develops…
This entry was posted on Tuesday, March 24th, 2009 and is filed under Health Care. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
March 24th, 2009 at 3:05 pm
So says you, I am perfectly happy with my HSA. It covers my family and me. We have about a 10K deductible, so it basically protects us from catastraphic medical expenses, but that’s all I need it to do. Beside, whatever I put into it is pre-tax and deductible.
So here’s my stipulation…worry about yourself. Some of us are perfectly capable of dealing with life without your nanny-state coming to our rescue and dimishing the quality of medical services that we currently have.
March 24th, 2009 at 3:15 pm
J Harden: aint democracy a bitch? It’s your nanny state too, whether you like it or not. All of those folks who doubt your self-proclaimed “perfect capability” as well as how broadly such perfect capabilities stretch to most Americans?
Those folks are coming for you.
March 24th, 2009 at 5:40 pm
Freedom is the bitch Kranky. Alway has been and always will be in a constant struggle — against kings and democracies alike. Vigilance is the price of such freedom and I try to do my part.
I don’t rely on a third-party payer up to a point and once the stimulus plan kicks into high gear, as Justin promises, a significant portion of the population will be able to afford that (and many, many already do). If Obama wants to reduce medical costs, a good place to start would be removing the 3rd-party middle man from the transaction between doctor and patient (or at least marginalizing it to the truly desperate.)
As for those folks coming after me, I’m not sure what vintage of the federal health leviathan will emerge from the dark hearts of this administrations good-intentioned trainwreck. Perhaps they will come of after me, sign me up.
March 24th, 2009 at 5:59 pm
J. Harden: 10K is quite a substantial sum to lots of people. In fact, I might even call it catastrophic.
I’m very happy that you are able to do so well for yourself and your family. But here’s MY stipulation: Remember that you’re very fortunate and don’t forget many others are not there yet.
(right, yes, luck has nothing to do with it and you’re just very hard working…… because none of your advantages have to do with where you were born, natural intelligence, upbringing, or similar. You’d be just as successful do to hard work if dropped anywhere. Like a slum.)
March 25th, 2009 at 9:30 am
Trust me NTY — I know it is a lot of money. It is not an indiction of how well I am doing. As a matter of fact, the last 3 months of business have totally sucked and we’ve incurred some substantial debt for medical expenses. I wish I were rich — using Obama’s 200K a year definition. I am not. I am also not suggesting that the plan I have will work for everybody, but for many it will.
I am suggesting that to the extent possible, by taking out the 3rd-party payer, you reduce the cost of healthcare and have greater freedom in making healthcare choices and, by removing the 3rd party payer, I think one tends to make better health decisions and are able to negotiate directly with healthcare providers.
It is certifiable pathetic and morally and intellectually bankrupt to argue a comprehensive healthcare strategy using nothing more classwarfare platitudes.
March 25th, 2009 at 12:41 pm
JH, I am down with you on eliminating the middle man when it comes to healthcare.
Another thing is that I think giving everyone uninterrupted access to some pool that provides group purchasing power would be a very good thing.
It’s always shocking when you see what the inflated “most people don’t pay this number” costs are, and which are (IMO at least) too often charged to those in the worst position to foot that cost. I had a billing snafu, and got a bill for over $1400 for a cortisone shot from a podiatrist during a 20 minute office visit.
Hard to claim that aint insane.
And then folks often lose their group purchasing power when they lose their job, or soon thereafter, which is perverse.
March 25th, 2009 at 1:47 pm
The fascinating point (at least to me) is that the insurance industry has charged extra, or refused coverage altogether, for pre-existing conditions . . . but ONLY if you are getting coverage as an individual.
However, if you simply form a company (even a nominal LLC), you can get medical coverage without any questions about pre-existing conditions, and for a premium which depends only on your sex and age. A lot cheaper than getting it as an individual, too.
In short, the industry isn’t really offering that big a concession, for all that it is overdue.
March 26th, 2009 at 11:56 am
JH: You don’t think you are at risk? Well you are. wj is exactly right. My wife and I are self employed and had individual insurance. We sold our company, and after that she got breast cancer. Guess what no one would insure us. Not at a higher premium, they just turned us down. What do you do then?
We were lucky enough to have the resources to start a new company (with at least one employee) and get insurance that way (see wj).
We had been planning to retire, but I think that will have to wait until we are old enough to qualify for Medicare.
The whole idea of insurance is to spread the risk, but the insurance companies only want the healthy people.