Chronic Babe has written an article about her recent experience with a rejection letter from a long term care insurance company because of her fibromyalgia. Although Jay works with long term care in addition to health insurance, my area of expertise is confined to health insurance, and I’ve worked with underwriters for numerous Colorado health insurance carriers regarding fibromyalgia. In the individual health insurance market in Colorado, I know of two major carriers who refuse to consider any applicant with fibromyalgia. There are a couple other carriers who will look at the condition on a case-by-case basis, but if coverage is offered it is with a hefty rate increase (usually 50% – 100%).
MDODblogger who hosted this week’s grand rounds, commented that:
“it seems to me that insurance companies should be allowed to manage their risk as they see fit, for the alternative is to do away with insurance as we have known it.“
Let’s look at this a little more closely. If we replace the word “insurance” in that statement with most other commodities, I would agree with this observation. It’s the essence of a free market system (and indeed the only way a supply and demand model works) that suppliers should be able to set their prices and choose their customers. And in return, customers should be able to reject products they deem too expensive and choose where to spend their money. For a vast array of products – from jeans and sofas to cleaning services and auto maintenance, the supply and demand model works well. The free market does work, but it rests on the principal that if one cannot pay the market price for a service, one cannot obtain that service. Again – that’s fine for most goods. But without at least some access to health care, one’s very life is in danger in the event of a catastrophic illness or injury. Without health insurance, people are more likely to die from treatable illnesses. In the health care industry, when the outcome can be a matter of life or death, it seems that it would make sense to shift our focus towards something a little less market (and profit) driven. Or at least to supplement it with a federal health insurance program available to those who cannot afford or qualify for private health insurance.
The list of conditions that can make a person ineligible for individual health insurance is several pages long. Without access to an employer-group policy, and in states where there is no high risk pool health insurance available, people with these conditions cannot purchase health insurance at any price. Because of this, health insurance doesn’t really fit the free market model, especially in the heavily underwritten individual market. Since health care is a purchased commodity, and a very expensive one at that, health insurance is a necessity. Very few of us have the means to pay for all of our own medical care without health insurance, especially in the event of a catastrophic health problem. And our current (mostly private, somewhat free-market) health insurance system has proven itself unable to insure all Americans. There are 46 million people in this country without real access to health care, because they don’t have health insurance. For some, it’s because they can’t afford the premiums. For others, they aren’t eligible because of pre-existing conditions. Whatever the reason, it’s a major weakness in our health care system.
I like my private (HSA qualified) health insurance policy, and I want to be able to keep it (hopefully I’ll continue to be able to afford it). And I know lots of other people who feel the same way. But for those who are unable to afford a private policy, or unable to qualify at any price, we need a safety net funded with tax dollars. For essential commodities that cannot be provided to everyone via the free market, I don’t believe that having the government step in and offer a back up system signifies the downfall of the free market – it just guarantees a service that isn’t adequately provided in a fully market-driven system.
