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View Diary: Health Care Reform Bill Mythbusting #1: "Junk Insurance" (133 comments)

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  •  This has nothing to do with unfairness (2+ / 0-)
    Recommended by:
    glynis, Common Cents

    This is basic economics. If you are running an insurance scheme - of any sort, whether it be non-profit, private, or yes, even public - everybody needs to pay in. That's how Social Security works, for example.

    If you require insurance companies to accept anyone and if you require them to charge people roughly the same rates, then if healthy people can opt out, the risk pool gets worse. The cost-per-person goes up, and the cost spirals.

    States have tried community-rating without an individual mandate. Of those states, Massachusetts is the one with the lowest premiums. Community-rating that allows people to not buy insurance just leaves the sicker people the ones buying insurance.

    •  The community rating stuff is not the regulation (1+ / 0-)
      Recommended by:
      thethinveil

      I'm talking about. Heck, I don't even consider that regulation. I'm talking about recision etc.

      There is no connection, unless you think the insurance companies will be less cooperative on those issues without a mandate.

      Ok, so I read the polls.

      by andgarden on Thu Dec 17, 2009 at 09:11:31 PM PST

      [ Parent ]

      •  The mandate works both ways (1+ / 0-)
        Recommended by:
        glynis

        Yes, you have to buy insurance. But at the same time, the company cannot refuse to sell you the product. And they can't kick you off at any time.

        Your argument is that they should be able to do the last two without a mandate.

        The problem with rescission without universal coverage and, yes, a mandate, is again, that with a sicker risk pool, if you get very sick, you are suddenly a bad risk. And by keeping you in there and paying your costs, the price goes up for others - and they may drop out of the system, thereby increasing the expense of insuring the pool yet again.

        •  Have you ever studied utilities regulation? (1+ / 0-)
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          thethinveil

          Do you know how impossible it is to get accurate information out of such services about their real costs?

          I don't disagree with the model you present, but it's all predicated on insurance company transparency and good faith that I do not take as a given. That's why the mandate must be tied to the availability of a public option. Otherwise, there is no real way to determine whether the insurance companies are just making up their costs.

          Ok, so I read the polls.

          by andgarden on Thu Dec 17, 2009 at 09:20:29 PM PST

          [ Parent ]

        •  Civil Rights Have Been Around For A Long Time (1+ / 0-)
          Recommended by:
          thethinveil

          In any number of areas businesses have been required to do business with people in other non-discriminatory ways (such as race) where at the same time Civil Rights didn't require those newly-liberated from having a mandate to buy anything. Somehow businesses not only survived but thrived post-Civil Rights despite Civil Rights not requiring mandates.

          •  Is it more expensive to serve black customers? (1+ / 0-)
            Recommended by:
            glynis

            Insurance is a different ballgame than a normal business.

            I am not arguing the health insurance industry are all cuddly. I'm simply pointing out that ANY insurance scheme, be it private or public, requires broad participation if you're going to keep the cost-per-person low. (Social Security being a perfect example - everyone pays in, though it's the elderly who benefit.)

            You can't require guaranteed issue, community-rating, bans on rescission and denials of care based on pre-existing conditions, without requiring universal participation or else the cost will skyrocket, even under a public, not-for-profit plan.

            If you are arguing that the mandate needs to be removed, then fine. But you have to insist in that case that most of those types of reforms go as well.

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