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October 03, 2005
Guaranteed Issue laws not conductive to Health Savings Accounts
Guaranteed Issue laws allow people to wait until they are sick before buying health insurance, and any insurance company doing business in the state cannot deny them coverage. This naturally has the effect of raising premiums and is not conductive to Health Savings Accounts (HSAs). Can you imagine how much automobile insurance would cost if you could wait until you have an accident before you buy the insurance?
Only five states still have this ridiculous law — Maine, Massachusetts, New Jersey, New York, and Vermont. None of them have any insurance companies that offer HSA plans to individuals, simply because the risk to the insurance company is too high.
State legislatures should of course repeal these laws, but at the very least they should make an exception for Health Savings Accounts. This would make health insurance much more affordable, and would likely have a large effect on reducing the number of uninsured.
Posted by Wiley Long at October 3, 2005 09:31 AM
Comments
Your comments smell of social darwinism. That anyone can compare car insurance to health insurance is insulting. Those who pose a higher risk in the car insurance industry deserve to pay higher premiums due to their level of risk. While not 100%, it is certainly more under one's control than one's health.
Those who suffer from genetic disorders, life-long medical conditions such as diabetes, incurable freak illnesses and accidents strike at random. People in these categories (and I'm not one of them, so I'm not here to defend my healthy self) should be just as well protected as anyone else. Any time someone tells me they don't need health insurance and can't believe how expensive it is (i.e., perhaps that they are paying for "others'" health care), I have to stop myself from wishing horrible illness on them and their family.
The solution: mandatory health insurance for all. That way, the playing field is level, the coverage is adequately subsidized, and health care improves.
We shouldn't be worrying about the insurance industry, we should be worrying about our fellow friends, family members, co-workers and citizens.
The concept of health savings accounts is equally meritless. How many people do you think might avoid preventative care, due to having to meet a deductible, were they to enroll in such programs? How high do you then think regular insurance premiums without a dedictible will then rise? MSA's/HSA's do nothing but make chronically and seriously ill individuals all the less likely to be able to get equally valuable, high-quality medical care.
Equality in health insurance protection is the only fair solution. Mandate coverage for all and stop trying to save the profits of the insurance companies.
Posted by: Shannon at June 27, 2006 06:00 PM
This is a tricky question, and there are no easy answers. Fortunately, states can still experiment and write their own insurance laws, so we can see what works and what doesn't. Massachusetts is doing just what you describe, and we'll see what kind of results they get. I happen to be a little skeptical.
We know what happens when states have guaranteed issue laws. Providers leave the state, competition drops, and prices skyrocket. There are very few insurance companies doing business in those states, and there are higher number of uninsured. Why? Because premiums are unaffordable, and because there is not incentive to carry health insurance if you can wait until you get sick to buy it.
Posted by: Wiley Long at June 27, 2006 06:52 PM
This law is fascism, plain and simple. While the personal mandate represents a lovely gift to the greedy bloodsucking insurance companies, these useless products, that citizens will be forced to buy, cover nothing and are prohibitively expensive. I'll move to New Hampshire before I'll buy this stuff!
Posted by: Ron Norton at June 23, 2007 03:16 PM