Massachusetts Long Term Care Insurance

PCI now has a reference to a recent article in The Wall Street Journal reports the actual experience of a Massachusetts health insurance company [] Harvard Pilgrim with the "you must buy health insurance "State plan for the year ended 3 / 31 / 09.

According to the articles, 40% of the holders of the new company policy in that year remained with the company for less than five months. During this period, the holders of short-term policy ran the average monthly cost of $ 2,400 - far exceeding the premiums paid.

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What happens?

The law of Massachusetts health insurance is similar to ObamaCare. Insurance companies may refuse to issue a political one. They have the same rates to all within certain categories, regardless of health history or evidence that may be future medical costs.

And the penalty for not having insurance is quite low.


So, people are gambling system

When they think they are healthy, they refuse to buy insurance and pay the "no insurance" penalty instead.

But when they know they will need expensive medical care, they register, get care, then drop the insurance.

My example: If you think about it, it is much cheaper for a young pregnant woman to register to even $ 1000 per month health care for five months and payment of insurance for Ob-Gyn and fees Baby Delivery something [like $ 15,000 in MA if everything goes normally], then abandon the insurance [or stop paying, what is the] same thing.

Example number 2: a smoker who has been in good health and has no insurance gets the sad news he has cancer of the lung. The good news is that it is early and curable. He jostles to get coverage - $ 1,000 per month for a few months is much cheaper than radiotherapy alone for $ 12,000 not to mention the following three months of chemotherapy to $ 1,000 per week plus bills consulting his oncologist 7,000 $. When he is in remission, he continues to pay insurance - it can still sign later with a different insurance company if they need more expensive medical treatments.

Example number 3: A person who is diagnosed with a chronic disease in adults - Type 2 diabetes, ALS, COPD, etc. S / he has not already covered by insurance. Now they are faced with medical bills within the range of $ 2000 per month. So they take out insurance at a cost of $ 1,000 per month - half from their costs of chronic care to someone else (and all other covered medical expenses of all kinds). [This person keeps the insurance until they are eligible for Medicare or Medicaid.]


Naturally, insurance companies can not make money on "customers" like this, so they must raise rates to everyone [MA law requires rates to be] fairly uniform . Companies doing the best job of making it too difficult for these "clients" to sign up has the advantage - they lose proportionally fewer such accounts and thus will have the lowest rates for regular customers.

Thus, it pays for health insurance companies in MA to focus solely on group insurance and have the lowest public profile and less on individual accounts.

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Somehow, I do not think that is what voters thought they were MA where their condition is adopted universal health insurance.



NOW for the crucial question - since the game system in this way is entirely predictable, why is ObamaCare designed to allow people to play with the system?

What will be done in the long term?

Is that any insurance company to participate in the exchange of insurance "at all if they know in advance that the buyers will Wil.