Friday, April 02, 2010

Insurance Industry Already Finding Ways to Game New System

A lot of the deficiencies in the health care bill are due to catering to Republicans for promises of votes, then every one of the Republicans voted against the bill.

Published on Wednesday, March 31, 2010 by The Huffington Post
by Dan Froomkin

The insurance industry's attempt to weasel out of one of the few provisions of the new health care reform law that took effect immediately is a harbinger of what's to come.

In this case, the companies that were balking at covering sick children quickly relented under media, congressional and White House pressure.

But far from being satisfied with a windfall of new customers and massive government subsidies, the nation's insurance companies appear to already be busy devising ways to game the new system. Their goal, as ever: Maximizing profits by paying out as little on actual health care as possible.

And next time they start to weasel, Congress and the White House -- and the media -- may not be paying attention anymore.

"This is what you're going to see as each element in this plan comes up for implementation," said Marcia Angell, a former editor of The New England Journal of Medicine who now teaches at Harvard Medical School. "This insurance industry is going to give up nothing."

In the short run, companies are expected to keep doing what they've been doing, which means, among other things, jacking up their rates. "There's nothing to stop them from raising their premiums, and that's what they're going to do," said Angell, a supporter of "single-payer" health insurance.

The new law's ban on discriminating against adults with preexisting conditions doesn't kick in until 2014.

"In the meantime, they can continue to cherry pick the healthiest customers, while foisting the sick into the new high-risk pool," said Wendell Potter, a former senior health insurance executive at CIGNA who went rogue and became a consumer advocate.

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Angell also pointed out that there's been very little coverage of the fact that insurance companies will still be allowed to charge older people (over age 55) much more than younger people. Three times as much, to be precise.

As a result, people between ages 55 and 65 (when Medicare kicks in) who don't have enough income to pay high premiums will be left with two options: Not buying insurance and being hit with a fine; or paying premiums they can't afford.

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