Daily News Updates - Health Insurance News

McCain’s Proposal, Pt.3 – Inadequate health insurance could blight our nation.

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Shared-risk health insurance promotes fixing the health insurance crisis, whereas individual-risk health insurance does little to fix the crisis.

Moving everyone over to individual-risk health insurance risks the danger of fragmenting the sharing of risks and costs. The sharing of risks and costs is the great bedrock of any good health insurance plan. Individual-risk health insurance entices the young and healthy workers to bail out of their employers’ group policies simply because it’s cheaper. The older or less healthy colleagues will be left behind and on their own.

The cost of the employer-based health insurance premiums will, inevitably, rise. Ultimately, it will rise to the point where many employers will drop their health coverage all together. This will leave the older and sicker people to be forced to buy policies in the open market.

Mr. McCain suggests that the government would be there to help underwrite the higher-risk people in state-level high-risk pools. As every program of this type well knows, the cost of achieving this would be phenomenal. Mr. McCain is only setting aside a mere $7 billion to $10 billion per year for this purpose. All the experts agree that this tiny amount would only be a drop in the bucket.

Another major tenet of Mr. McCain’s plan would be to, in effect, de-regulate the health insurance industry. By allowing the industry to sell insurance across state lines, nearly all of the various states’ consumer protection mandates would become ineffective. Most of these existing mandates are designed to ensure that consumers will get, at least, adequate coverage. In the name of promoting competition, inadequate coverage may well become the rule in our nation as consumers skimp on quality to save a few bucks.

Continued…
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