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View Diary: Post exposes an inconvenient truth - insurers will still cherry pick (168 comments)

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  •  All of the House Bills started from same text (2+ / 0-)
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    catdevotee, Rachel Q

    Those insurers that serve a relatively healthier population pay into a fund that is then distributed to those insurers who serve less healthy populations.  I recall this provision being included in at least one of the House bills

    I didn't see that anything like that was in any version. Instead insurers are pretty limited in how they enroll insurees due to the very nature of the Exchange. When a customer goes to the Exchange website they should be presented with a complete list of insurers and under Sec 112 cannot turn away anyone who wants to enroll. If by some chance they manage to get around the open enrollment provisions and end up with a healthier pool than the competition Sec 116 mandates that they rebate any savings to the policyholder.

    The insurance companies are hell-bent on watering down the provisions in Secs 111-116 of the House Bill, in their eyes the Public Option is more or less a sideshow, its existence serves as another brake on them but does not force them by itself to modify their business models. Secs 111-116 do and in a major way. With them in force companies can't make profits by predatory gaming of the risk pools and denying claims. Those rapidly become counterproductive and start shaving gross profits.

    •  The situation I am trying to describe is one (0+ / 0-)

      created by chance, not by deliberate underwriting, pricing, or other gaming techniques.  By chance a BC IL could have a relatively less healthy population than another insurer which could be serving the same or a totally different geographic market.  European countries which have private insurers-not the UK- make adjustments so one insurer isn't stuck with a disproportionate share of unhealthy patients that it enrolled by chance.

      •  In my original post above (0+ / 0-)

        I was referring to a paper by law professor Timothy Jost of Washington and Lee University that I read a while back and was recalling from memory. I have now looked it up and here are the points I made above:

        The Experience of Switzerland and the Netherlands with Individual Health
        Insurance Mandates: A Model for the United States? Timothy Stoltzfus Jost

        "[Insurers] are not allowed to compete by limiting the benefits they cover. The basic benefit package that insurers must cover is defined by law and is quite generous. In both countries, insurers are subject to community rating and open enrollment requirements. The ability of insurers to lower premiums by shifting risk to consumers through cost sharing is also limited."

        "In both countries, a risk adjustment scheme redistributes premiums among insurers based on the risk profile of their insureds. "

        The point is to create one giant risk pool for the entire population and equalize the risk across all insurers.  There was language to this effect in at least one of the House Committee bills because it got totally misconstrued in that lame 75 point pants-on-fire tea-bagger endorsed email that so famously accused the government of tapping directly into your bank account, etc, etc, etc....

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