Daily News Updates - Health Insurance News

McCain vs Obama: Common Ground, Pt.4 – Mr. McCain’s tactic; Lose state-level mandates.

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2) This would be done by allowing the health insurance providers in the industry to file some paperwork and pay their taxes elsewhere, thereby escaping the authority of the state where they are selling policies. The intended purpose of these state-level mandates is to prevent unscrupulous health insurance providers from taking advantage of the consumer. Health insurance is in an area in which few consumers are savvy enough to sort out the ‘legalese’ before making their purchases.

The Council for Affordable Health Insurance (CAHI) informs us that this year there were “1,961 health insurance mandates, defined as a requirement that a health insurance company or health care plan [must] cover”. These mandates cover abuses like ‘cherry-picking’, limits on how much insurers can raise premiums based on an individual's health status, excluding coverage for pre-existing conditions, revoking (rescission) an individual's health insurance policy without advance review by the state, spending at least 75 percent of premium revenues on health care and raising premiums without meaningful oversight.

Mr. McCain is partly right when he states that different states' regulations "prevent the best companies, with the best plans and lowest prices, from making their product available to any American who wants it." Research from The Council for Affordable Health Insurance estimates that the cost of basic health care coverage increases due to these mandates from 20% to 50%, depending on the state. So, many plans would be cheaper, just as a scooter is cheaper than a motorcycle. Does that make the scooter better if you must travel on it 100 miles every day? Defining what the ‘best plan’ is must depend on the application. In the case of health insurance, many important applications are covered in the five criteria listed in the paragraph above. So, again, this measure weighs well toward the micro-objective of lowering premium costs to the consumer. As far as its effectiveness toward the ‘vision’ that carries the greater weight, it may not stack up. Remember, that vision is to “avail effective health insurance to all Americans.”

For more on the ‘mandate threat’, please refer to articles “Paul Revere, but not Robin Hood”, “Defining the Health Insurance/Care Chasm” and ”Major 'Underinsured' Sector”.

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