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Don’t Shoot the Messenger

October 23rd, 2009 – There’s an old adage, “Don’t shoot the messenger.”   In this case the messenger is the insurance companies who have been delivering the bad news that health costs are out of control in the form of ever increasing health insurance premiums.

Rather than addressing the problem of skyrocketing health care costs, our government seems hell bent on shooting the messenger and hiding the problem behind huge subsidies that will be paid for by current and future generations of American taxpayers.

If all the government does is change health insurance then they have doomed us all to watch our spendable income eroded by the skyrocketing costs of health care that keep driving up health insurance premiums.  We do need to have health insurance for all, but this change needs to be done with fiscal and actuarial responsibility.

If the government does not include enforceable mandates for health insurance coverage for all as part of the health reform legislation that will cause significant problems for insurance affordability.   Without a mandate, by making all individual health insurance plans guarantee issue regardless of pre-existing condtions you can expect the health insurance premiums for individuals to increase significantly in the future.

The only question is,  how much will your premiums increase?  It is hard to say for certain, but it is reasonable to expect that the premiums will rise near those of employer sponsored small group premiums, which are roughly 40% higher than individual health insurance premiums and are also guarantee issue plans.

Health reform has many good intentions, but if the government gets this wrong it will result in increased financial hardship on people that buy their own health insurance, particularly those people in states with relatively lower premiums like Colorado.

I know our Colorado health insurance premiums do not seem inexpensive, but take a look at what the premiums are in guarantee issue states like New York and New Jersey to get a preview of  the future.   You might also want to look at Massachusetts’ universal health insurance program to see what went wildly wrong with their health reform efforts.

Today, President Obama went to Massachusetts, which implemented a universal health insurance plan similar to what is being proposed for America.    Did he go there to brag about the program’s success?  Not in the least and he is avoiding the topic altogether, focusing on clean energy instead.  In fact, the president’s critics say his reluctance to spotlight the Massachusetts model is real-world evidence that his vision would not work on a national scale.

The Massachusetts health insurance plan’s penalties for not enrolling are so low that many people go without insurance, knowing that if they get sick they can sign up then and be covered.   If an emergency happens those folks would be out of luck, but that is a risk many people are willing to take in their effort to “game” the guarantee issue health insurance system.

There are two other major problems with Massachusetts universal health insurance.  First, the plan is much more expensive than originally projected.  Secondly, universal health insurance does little to address the core problem of rising health insurance costs.   Frankly, if the costs for health services didn’t keep going up would we have so many uninsured people?   Perhaps our government is unable to see the forest through the trees.

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