Tuesday, April 18, 2017

Yes, under Obamacare single individuals have to pay for coverages they could never use

One of the biggest controversies with Obamacare has been that even in the individual market, people have to pay for coverages that they have zero chance of needing personally.

The Christian Science Monitor had an explanation back in 2013 that still bears reading.  It’s about ending “discrimination” and enlarging the risk pool in the individual market.

When I was working for a long term employer (through the end of 2001), I had group coverage only for myself.  My premiums were about one-fourth of a family plan.  But I think they technically could have covered “pregnancy”.  It was not viewed as likely to increase claims substantially among workers.

One could ask, isn’t thus paying for “sin” – childbirth out of wedlock?  But you could turn it around and say, as a gay male, aren’t others paying for my presumably higher risk of HIV?  (In fact, I am HIV-).  In fact, now, as Obamacare comes under fire, paying for protease inhibitors or, particularly, PrEP could become controversial.

Obamacare’s own site lists the required coverages here.

There is also literature that says that for small employers, individual plans will be cheaper than group plans, because the individual plans are open to larger pools.

Obamacare allows insurers to set premiums higher for certain risks.  The most “important” is probably family coverage – spouse and dependents, which can keep adult children until age 26 (for most needs).  But it appears that individuals even without children must cover pediatric services.  States have some discretion, but some states (like New York) have required that pediatric dental coverage be embedded in all policies, and New York claims this is generally cheaper for everyone.

Much of the anger of Obamcare was that some policyholders seemed to be forced to pay a lot for services they didn’t need, after their older policies were canceled as substandard.  It’s not clear why some premiums rose so much. With health insurance, it is much more difficult to address the issue of "moral hazard" if, indeed, all lives matter.

My own case at ING was that I had inexpensive coverage that provided immediate first rate surgery when I had an accidental hip fracture in a convenience store.  The claim was subrogated against the liability policy for the company, but I wound up with fill salary and no deductibles in the end (after a brief fight over one issue).   But, again, I was “cherry picked” as a professional worker unlikely to cause claims.  Even so, ING was able to cover some disabled workers (or families with dependents with pre-existing conditions) fully without significant premium increases for everyone.  This seems much easier for large employers with professional work forces than for anyone else.

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