Reforming Children Out Of Health Insurance
All along, I've called Obamacare "health care 'reform'" and "reform" is exactly what it's turning out to be. Check this out from the WSJ, how Obamacare killed "child-only" policies:
This week, almost every big insurance company in America--including Aetna, Cigna, UnitedHealth Group, WellPoint, Humana, Coventry, some Blue Cross Blue Shield affiliates and others--stopped writing "child-only" policies in the individual market. This is a niche product that parents typically buy when their employer health plan doesn't cover dependents. The exact plans vary company to company and state to state, and the insurers will still offer family policies and make good on the child-only policies that they've already sold. But most won't be writing new ones.In other words, for-profit businesses are refusing to sell products that consumers want to buy. Exact data aren't available, but the child-only market covers roughly a million kids a year.
The reason is a regulation that President Obama mentions every time he talks about health care, as he did recently in Falls Church, Virginia: "Children who have pre-existing conditions are going to be covered." Insurers are now required to cover everyone under 19 when their parents apply for coverage, regardless of health status. The problem with this kind of "guaranteed issue" is that it encourages people, in this case parents, to wait until their kids are sick before seeking coverage.
This drives up premiums for the healthy, encouraging consumers in turn to drop coverage, and eventually it leads to what's known as a "death spiral," the industry term for an insurer with rapidly increasing costs as a result of population changes in its coverage pool. The child-only market is a particular death-spiral risk because it is so small and unstable, which explains why so many insurers left in a stroke.
The collapse of the child-only market is a preview of what will happen when guaranteed issue and the rest of ObamaCare comes on line in 2014 for adults, except then insurers will have nowhere to flee. Exiting the market will mean going out of business.
Do repeat this to everyone with whom you have a conversation about health care: health care that is not available is not "denied".
I've had conversations with people who think that care is magically going to occur on demand for them.
No. It will not.
Radwaste at September 26, 2010 6:18 AM
Obama never said you could afford to keep your current health care when he got done, suckers.
MarkD at September 26, 2010 6:52 AM
Insurance companies only pay for healthcare in the sense of "who writes the final check". Actually, it is the collection of insured customers who pay for their own health care through the organization of the insurance companies.
An insurance company can arrange a yearly payment of $100 + $20 to insure against a 1/100 chance of losing $10,000. People with this risk are willing to pay that yearly "premium", an affordable amount each year to avoid an otherwise unaffordable loss. The extra $20 pays the insurance company for its work.
People might pay $200 or $300 for this protection. Competition among insurance companies keeps the price much closer to the expected loss. Most people will refuse to pay $500 for this insurance. They would be paying 5 times their expected loss, and would say "My chance of losing $10,000 in the next 20 years is 1/5th, but by that time I will have paid the entire loss in premiums anyway".
ObamaCare is trying to extract money from young people, to pay for old people, by forcing them into the same insurance group. Say that treating a heart attack costs $200,000. A man aged 30 might have a risk of 1/2000th ($100/year risk). A man aged 65 might have a risk of 1/100 ($2,000/year risk). A rational 65yo man would pay $2,000 to $6,000 each year to cover this risk, but a rational 30yo would only pay $100 to $300 each year.
ObamaCare says that we will average out these expected costs and charge everyone, young and old, say the same $1000 per year for this risk. That is a subsidy of $900/year to the old (who regularly vote) taken from the young (who don't vote as much). The beauty of this is that it is hidden within insurance rates, and the blame goes almost completely to the "evil" insurance companies.
So, being forced to buy ObamaCare is an important part of the politician's plan. Otherwise, rational young people would opt out and take their chances. The good news is that people suspect robbery when they are forced to do anything, and they are correct.
Amazingly, "guaranteed issue" says that a person who is already sick (preexisting conditions) and requiring expensive care can sign up at any time. This treats the insurance companies as if "they" are the ones paying for the sick. Actually, it is the customers who must pay through higher premiums. And more amazingly, the uncertainty within ObamaCare is forcing insurance companies to stop offering some policies (rather than just raising premiums), with more policies to be not-offered in the future.
Team Obama-Pelosi-Reid are not even competent to properly carry out the scam.
Andrew_M_Garland at September 26, 2010 11:31 AM
Amy Alkon
https://www.advicegoddess.com/archives/2010/09/reforming-child.html#comment-1758708">comment from Andrew_M_GarlandAndrew, thank you so much for the way you explained that.
Amy Alkon
at September 26, 2010 11:37 AM
I also very much appreciate the comments of Andrew Garland and the others. Contrast the wise words on this page with the chastising done by Bill Maher et co here. Pretty easy to condemn others (ie. the insurance companies) when you don't have to pay any part of the bill.
Robert W. (Vancouver) at September 26, 2010 4:51 PM
Thank you Amy and Robert. I appreciate the support.
Andrew_M_Garland at September 26, 2010 5:49 PM
this pushes my thoughts into the realm that this is a feature, not a bug... from bambi's point of view.
you see, when all the evil insurance companies have taken their policies and gone home, there will be only Uncle left to do anything.
Once there is only Uncle, you will do what Uncle says.
SwissArmyD at September 26, 2010 8:29 PM
Great post Andrew though I don't think it is quite as bad as you paint it.
Where I used to work the HR person told me that the reason our rates were going up so much was because of two major factors. One is as Andrew said, lots of people nearing retirement. The other was all the people having babies -- especially in their 30s. Having a baby is very expensive and just about everyone their did that.
The Former Banker at September 26, 2010 8:47 PM
Amy - That's the entire plan. The Dems want the health insurance companies to collapse so that the masses will clamor for government single payer.
ParatrooperJJ at September 28, 2010 12:15 PM
Leave a comment