This recent commentary in the Wall Street Journal (see below) raises some important questions about our perceptions about the health insurance industry.  With President Obama’s address to a joint session of Congress just 2 days away it is good to review the key issues.  Guarantees of coverage for the individual policy market are really one of the key issues to start with.  It is true, that guaranteeing coverage does open the risk of individuals purchasing insurance only when they are sick.  However, regulated rating of subscribers is certainly acceptable, within reason, as long as denial of coverage is not an option.  Additionally, the current employer mandate is subsidized by the tax code, but individual policy purchasers are not offered the same benefit.  This double standard must be corrected.  Health insurance premiums must be deductible for all, or for none – individual persons or business entities.

Nevertheless, this situation offers the opportunity for insurers to compete for healthy, younger subscribers in an effort to get them ‘aligned’ with an insurance provider before they become ill.  The incentive for insurers to do so would be to expand their premium base while the subscribers are young and low users of services.  This would help offset subscribers who come into the ‘system’ later when they are ill or injured.  Still, it is clear that health insurers must be prevented from using pre-existing conditions as a pretext to deny or restrict coverage they offer or sell to the public.  The related issues to this policy, as we have outlined will need to be addressed for this primary aspect of health reform to be achieved . . . obi jo

The Truth About Health Insurance
Only nine states have the costly rules that Obama wants to impose nationwide

The White House is priming the defibrillator paddles to revive ObamaCare, and its new strategy is to talk about “health-insurance reform,” rather than “health-care reform.” The point is to make its proposals seem less radical than they are, while portraying private insurers as villains for supposedly denying coverage to the sick.

Sounds like a good time to explain a few facts about the modern insurance market. Start with the reality that nine out of 10 people under 65 are covered by their employers, most of which cover all employees and charge everyone the same rate. President Obama’s horror stories are about the individual insurance market, where some 15 million people buy coverage outside of the workplace

Mr. Obama does have a point about insurance security. If you develop an expensive condition such as cancer or heart disease, and then get fired or divorced or your employer goes out of business—then individual insurance is going to be very expensive if it’s available. But what the President and Democrats won’t tell you is that these problems are the result mainly of government intervention.

Because the tax code subsidizes private insurance only when it is sponsored by an employer, the individual market is relatively small and its turnover rate is very high. Most policyholders are enrolled for fewer than 24 months as they move between jobs, making it difficult for insurers to maintain large risk pools to spread costs. . . read more @

The Truth About Health Insurance – http://online.wsj.com/article_email/SB10001424052970204908604574332293172846168-lMyQjAxMDA5MDEwMjExNDIyWj.html

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