Map of life expectancy at birth from Global Education Project.

Thursday, May 11, 2006

Okay, Dont' Ignore it After All

It turns out that the Enzi Bill to override state health insurance regulation, that I wrote about yesterday, isn't such a dead issue after all. Not only that, it's even worse than I realized, because in addition to invalidating state regulations on required services, it also overrides state regulation on risk rating.

Remember that I talked a while back about the death spiral, where without regulations, insurers will charge more to businesses with older and/or otherwise less healthy workforces, until they can no longer afford any coverage for their employees. States prevent this by restricting the price differential insurers can impose. Insurers don't really mind, in fact it helps them, because they just put everybody into one large pool, so that the customers with the healthiest workforces pay a little more, and those with the least healthy less, than they would under strict "risk rating." This benefits society by spreading the cost (after all, we're all going to get old eventually), and reducing administrative and marketing costs. The Enzi bill will end community rating.

What a horrible piece of crap this is. According to Families USA (linked above):

CBO concludes that this terrible bill would raise premiums for one-fourth of businesses in the small group market, and some individuals will find it harder to get coverage for conditions or services that are now mandated under state laws. This wholesale elimination of consumer protections will, at best, trim only 2-3 percent from the premiums of some businesses with young, healthy workers.

Oh, and by the way -- the bill would also destroy the recently passed universal coverage legislation in Massachusetts (which I have agreed to be optimistic about for the time being). What is hardest to figure out is why they are doing this. Who is the constituency? Who is bribing them to hurt America in this way? It most certainly isn't going to get them any votes.

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