State health insurance reform lookin’ good


Is there anything worse in America than the health insurance industry?

Because reading about proposed reforms for it here in Wisconsin makes me seriously doubt whethere a greater evil in our society exists. With the Bush administration out of power, I think a good case could be made for this thesis.

Nevertheless, it was good to hear that there may be some vital improvements at the state level to keep insurance companies from “getting rid” of undesirable customers. Here’s the deal: Although insurance companies are required to re-new a customer’s contract every year, despite the customer’s medical condition, they are allowed to raise prices drastically in order to force the customer out of the plan.

Hence, what many insurance companies do is create special “closed blocks” policies for people with much greater health conditions. These people in the closed block pay much higher rates than new customers with less health issues. As the Journal-Sentinel notes, this practice fundamentally undermines the central tenant of insurance: shared risk. All customers are supposed to be in the same pool and together they share the risk and costs, which is generally incurred by a small group of the seriously ill.

That insurance companies circumvent this process is simply a side-effect of the tragic system of health care in this country. Luckily, in Wisconsin the government has recently been committed to taking the problem head-on, by trying to insure as many people as possible through BadgerCare and now this provision, which doesn’t seem to be garnering opposition in the legislature, at least not yet.


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