Sunday, February 21, 2010

With Change Comes Consequence

Twenty years ago, when Obama was organizing communities, the folks in New York set about to reform health care. The L.A. Times summarizes the consequences of that decision.

The legislators had a simple goal. Pass a law requiring insurers to accept anyone, regardless of their health.

Decisions, and change, have consequences.

Premiums in New York are now the highest in the nation by some measures, with individual health coverage costing about $9,000 a year on average. And nearly one in seven New Yorkers still lacks health coverage, a greater proportion than before the law was passed.

The state has become a victim of a dangerous dynamic in insurance markets. Laws allowing consumers to buy insurance at any time often saddle companies with a lot of high-cost customers.

That in turn drives up premiums, pushing away younger, healthier people who are vital to a functioning insurance system.

So why isn't Washington talking about this?

Well, if you have to ask . . .

The law allowed consumers to buy insurance after they became sick with only a relatively short waiting period. They could also drop it when they no longer needed it.

The New York insurance market did not collapse, as some insurers had warned. But in the ensuing years, more older and sicker New Yorkers bought individual health plans. And premiums shot upward.

Since 2001, the average premiums for a health plan on the individual market in New York has nearly tripled, according to the state Insurance Department. In some counties, it is impossible to buy an individual plan for less than $12,000 a year.

But Obamacare is supposed to bring premiums down, not drive them up. Is there something they are not telling us?

Again, if you have to ask . . .

One might say that NY is an aberration.

Well yeah, you can say that, but it doesn't make it true.

In New Jersey, which enacted similar insurance rules at the same time as New York, researchers found that the regulations contributed to a 50% decline in enrollment in individual health plans and a two- to threefold increase in premiums.

Kentucky and Washington were forced to roll back their new insurance rules in the 1990s after insurance companies abandoned the state market. In Washington, the three largest insurers simply stopped issuing coverage to individuals.

But Obamacare is supposed to increase competition, bringing down premiums.

Yeah, that's what they are telling us, but just saying it doesn't make it true.

Changes have consequences.

Yes they can.
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