Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses. In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe. The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month. The previous year, the company’s data show it had even more high-spending, short-term members. Over those two years, the figures suggest the price tag ran into the millions. Other insurers could not produce such detailed information for short-term customers but said they have witnessed a similar pattern. And, they said, the phenomenon is likely to be repeated on a grander scale when the new national health care law begins requiring most people to have insurance in 2014, unless federal regulators craft regulations to avoid the pitfall. “These consumers come in and get their service, and then they leave because current regulations allow them to do it,’’ said Todd Bailey, vice president of underwriting at Fallon Community Health Plan, the state’s fourth-largest insurer. The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round. This is also the case under the federal health care overhaul legislation signed by the president, insurers say.This source those it quotes say Obamacare will allow the same irresponsible behavior. How can we afford to pay for people like this. They should pay for their own medical care. * "Perfectly predictable surprise" - I heard this term from a conservative female news analyst a few years ago; can't remember who.
Tuesday, April 06, 2010
Guaranteed insurance - what could go wrong?
Under ObamaCare insurance companies will be required to insure everyone and despite pre-existing conditions. What could possibly go wrong? Massachussetts started a health system similar to ObamaCare about 4 years ago. But people game the system. They don't pay for insurance when they are well. When they need medical care they sign up, get the care. Then cancel the insurance. This result is what we call a "perfectly predictable surprise." * Boston Globe