Daily News Updates - Health Insurance News

Mr. McCain on Health Insurance/Care, Pt.4 – Bi-directional risky business.

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After we have defined a clear purpose, then it becomes time to examine the likely hood of success. We can’t measure success without knowing the vision. Once the vision is agreed upon, we can look more closely the integrity of proposals. From Mr. McCain, 'risk selection’ is one of those fuzzy terms, overlooked by most voters. However, this little concept has one of the most profound effects on those seeking health insurance. Most of our country has been shielded from it’s effects for the last 60 years, or so. This is because most Americans have long-relied on employer-based health insurance, which is, largely, immune to the effects of 'risk selection’. About 60% of our nation’s insured rely on the stability of employer-based health insurance (or about 160 million Americans).

With Mr. McCain’s plan, this is expected to change drastically. Employer-based health insurance is intended to be replaced with private market individual health insurance plans.

Again, the greatest weakness in this plan for the average American is the 'risk selection’ effect. Unlike employer-based health insurance, private health insurance assesses every individual from a risk standpoint.

Of course they ‘cherry-pick’ the young and healthy. They either jack the premium cost or else completely deny those with lesser health – those who need health insurance the most.

Employer-based health insurance doesn’t work that way. With these, large ‘risk-sharing’ pools are used to spread the risk and even-out the extremes.

With McCain’s shift over to private health insurance plans will naturally exclude the Americans that need health insurance the most.

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