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Individual Health Insurance Woes

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Tying in to a very good discussion about the affordability of insurance on this blog last month, USA Today recently published an article about how many families are having difficulty purchasing individual (private) health insurance because they either have jobs that don’t offer coverage or because they are self-employed.

The article also quotes one study where researchers called various insurers trying to get policies for seven fictitious applicants who had medical conditions ranging from HIV to allergies. Of 420 applications, 37% were rejected.

“What we have shown is there are carriers who will turn you down if you have hay fever,” one researcher said.

Lots of interesting comments on the article, many of which advocate a single-payer health system.

In addition, there is another article today on Bloomberg.com about how Congress is going to start looking into the practice of “post claims underwriting.” This is a process where insurers use technicalities to cancel health care policies after patients get sick and run up large medical bills.

One example was a woman who had more than $100,000 in bills after she fractured a vertebrae in 2005. Blue Cross of Utah rescinded the woman’s insurance policy because the woman’s husband “hadn’t provided complete information about his 1996 back injury and surgery” on the family’s insurance application.

This is ridiculous. If the woman’s husband really didn’t disclose everything about his surgery, then his coverage should be denied. Instead, Blue Cross picked some nit and used it as a pretense to stop paying out on the woman’s care.

If insurance companies are going to cancel a policy for what amounts to no reason at all, are they going to refund all of the premiums that the families have paid? Or are they just going to keep those too - to teach the former policyholders a lesson for “lying”?

I’m wary about a single payer system that so many commenters in the USA Today article advocate. Look at what happens when insurance companies control the payment of claims - they can cook up some scheme on a pretense and leave you out in the cold on a whim.

If there is a single payer for healthcare expenses, then the Golden Rule applies - he who has the gold makes the rules.

What happens if the single payer decides to limit your total healthcare expenses to $100,000 over your lifetime to “save money”?

What if your single payer decides to stop paying for dialysis or limits the payments to the point that no medical providers want to or can afford to provide dialysis?

What if the single payer says that it will only pay for 100 hospitals in the nation to provide brain surgery and the waiting list to get such surgery is 12 months?

We need a fix to the healthcare problem in this country, but we also need to be very careful about what we ask for …

We just may get it.

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