The premium analysis data that Wellpoint recently released regarding the impact of pending health care reform legislation on health insurance premiums has been met with scathing attacks from people who are saying that Wellpoint is just trying to derail health care reform any way they can. From the very beginning, Jay and I have been in favor of sweeping health care reform. We know that there are many aspects of the current system that are broken, self-serving, and not in the best interests of the American people – especially the uninsured.
But it is frustrating to see data that appears to be supported by tangible evidence from other states being skewered as “fatally flawed”.
In New York, health insurance companies can’t decline applicants because of pre-existing conditions. Policies are community rated, with pricing variations only for the number of people in a family and zipcode where they reside.
I tried searching on google to find a brokerage like ours, serving NY, but I wasn’t able to find one. So I used the big box store of health insurance – ehealthinsurance – and got quotes for my own family, but with a NY zipcode. Three quotes were returned. Three. They varied in price from $304/month for a policy that looked like it only covered expenses relating to a hospital stay (and had no out-of-pocket maximum), to $2572 for an HMO with all the bells and whistles. Only two companies were represented (GHI and Empire Blue Cross Blue Shield). To say the pickings were slim would be an understatement. Not to mention that if we wanted anything more than an indemnity hospital plan, our health insurance premium would be more than our mortgage.
For comparison’s sake, when I get quotes on our website for our family here in Colorado, I get 459 options from eight reputable carriers, ranging in price from $133/month, to $991/month. True, we have to be relatively healthy in order to qualify for any of those plans, but if we weren’t, we’d have Cover Colorado as a fallback option.
In NY, individual policies are guaranteed issue, but people are not required to have health insurance. The result is that policies are much more expensive than they would be in other states, and most health insurance companies don’t do business in NY anymore. Healthy people who want to purchase a policy find that they can’t afford to do so, and the population of people with individual health insurance in NY is dramatically smaller than it was before guaranteed issue became law.
So for people who are crying foul over the Wellpoint premium analysis, I would urge them to consider what’s happened to health insurance in places like NY. Yes, companies like Wellpoint are in business to make a profit. But that doesn’t mean that everything they say in the health care reform debate should be dismissed. And if we don’t make sure that everyone becomes part of the health insurance pool (via a strong, enforceable mandate), we’ll likely be looking at fewer health insurance companies and far higher premiums after a few years of guaranteed issue policies.
