Daily News Updates - Health Insurance News

Paul Revere, but not Robin Hood, Pt.4 -- The Threat

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Projecting it’s parallels with health insurance, it’s not too difficult to see where the credit card industry has settled, after regulations went away. After all the good-credit market has been sapped, they start making too-good-to-be-true offers to families that are strapped. After determining a steady income, financially-strapped families are offered all kinds of promotions, like “free air fares” or to consolidate all their debts for low interest. After all the balance transfers are in place, all these companies have to do is wait for the slightest infraction. Then, the credit terms quickly turn into a nightmare for the borrower – 35% interest and every kind of penalty imaginable. These people are now strapped in. Without consumer protections, as Robert explains “Credit-card use and bankruptcy rose together for years (until the 2005 federal bankruptcy legislation), and last year, banks made $40 billion in plastic profits”. When a family is drowning in debt (especially for medical bills), credit may seem like the only life raft. This snare was addressed by the co-authors of ‘The Two-Income Trap’, Amelia Tyagi and Elizabeth Warren when they said “…the raft turns out to be made of cement”. Under these conditions the individual market for health insurance, fails on its own terms: Sick people can't get coverage they can afford. The rafts are reserved for people who already have life preservers. Hapless Americans with pre-existing conditions—cancer, asthma, diabetes, and the like—will be priced out of health insurance and thus healthcare. This way, insurers will maximize their profits by offering targeted policies to people with the fewest health expenses. Bush would be so proud.

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