Here we have yet another story on rising health insurance premium rates for individual policies (from The Chicago Tribune - click here to read the whole story):
Consumers in Illinois who lose their jobs and have no other option but to buy their own health insurance will get socked this year with premium increases of up to 60 percent, according to state records.
That group of consumers has been growing, as the recession has created more uninsured Americans looking for ways to protect themselves and their families. Now, Illinois consumers will get a glimpse into just how wide-ranging rate increases among individual health plans can be. The data, obtained by the Tribune, also provide a window into the overall trend of premium increases at large and small employers.
For the state’s more than half-million consumers in individual health plans, base rates will go up from 8.5 percent to more than 60 percent, according to state data. Base rates do not take into consideration health status, gender, age, place of residence and length of a policy — all factors that could raise premiums further.
This is a major problem in the current health care system. A move to individual choice and freedom will not work until the insurance industry finds a way to eliminate the wide disparity between individual and group policies. I’ve recently had a lot of experience exploring individual and group plans. The advantages of the latter are unbelievable. Portability, coverage of preexisting conditions, maternity coverage, and reasonable rates are just a few of the many benefits of having a group plan (even if that group is as small as two people!).
Early in the 20th century, many insurance groups began as nonprofits. They were essentially “safety nets” mixed with an element of charity. The healthy paid the same (or similar) rates to the unhealthy. They were all protected against catastrophe, and the healthy were willing to pay a bit more for the benefit of all. Sadly, our hyper-individualistic society seems to have lost this idea completely. We’re all out for the cheapest possible cost to us – whether we’re the consumer or the insurance company. Plus we now assume insurers will act as everyone’s safety net – not churches, families, charities, or local communities. This puts the unhealthy in a terribly difficult position: It’s harder and more expensive to get insurance, but everyone assumes you have it, so good luck getting help if you have a medical catastrophe and don’t have insurance!
The old charity-oriented form of health insurance now only exists in the bastardized form of an employer group insurance plan, where the employer cuts a deal with an insurance company to get a set of basic rates to provide a broad range of coverage to his or her employees.
Can we get back to a private charity-oriented plan that increases freedom and individual ownership without leaving the unhealthy out in the cold? I don’t know, but no one involved in the current debate seems to think much of this idea.
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