The House GOP Caucus has released some details about the “Repeal and Replacement” of the ACA. I won’t get into a prolonged policy discussion on Facebook about the pros and cons of that. But, one provision that has been reported…
High-risk pools: Further, the federal government under the proposal would provide states with “innovation grants” to help states set up high-risk pools that would offer coverage for U.S. residents with pre-existing medical conditions or to help offset consumers’ out-of-pocket costs.
High Risk Pools are a terrible idea. They have been a bad idea for nearly 30 years. The problem with High Risk Pools…
1) They work on the assumption that insurers do NOT offer community rating which spreads insurance risk. Community rating means that all people in the same CONTROLLABLE situation — age, controllable risk such as smoking, etc. — pay the same rate. By allowing insurance companies to adjust payments based on pre-existing conditions defeats the purpose of insurance in the first place.
2) High Risk Pools allow insurance companies to jettison costly patients onto government-subsidized payment pools, while they keep profitable, healthy patients in their pool. In other words, insurance companies insure those people who don’t need insurance; taxpayers fund the rest.
3) Of course — and this is not popular with some people — but, health insurance in the USA will never work properly until there is a “Personal Responsibility Requirement” for people to buy health insurance, just like all drivers need to buy car insurance, or just like banks require homeowners to buy fire insurance. Allowing people to NOT be responsible leads to healthy people NOT buying insurance, sick people buying insurance, and uninsured people using the emergency department for the care they cannot afford. When this lack of responsibility is promoted by policy makers…the so-called answer is a “high risk pool” which protects insurance companies, insures high cost patients at taxpayer expense or at the expense of sick people only, and continues to undermine a workable insurance market.
ONE SOLUTION: Several solutions to this problem — inclucing community rating and a responsibilty requirement. But, if you ARE going to promote a risk pool…it should be a RE-INSURANCE risk pool, allowing insurance companies to buy re-insurance to cover unexpected losses. This re-insurance pool, just like ALL re-insurance would be paid for by insurance companies to mitigate their risk, but it would not allow insurance companies to deny insurance to people with pre-exisiting conditions.
Sorry for the “policy post” — but, just some food for thought
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