Saturday, January 30, 2010

More on there is no simple bill

Economix blog has nice post on why the notion that Pres Obama should have just sought a bill banning pre-existing conditions and nothing else won't work. The pre-existing condition ban and insurance regulations come along with the individual mandate. One won't work without the other....and this shows a big problem with 'doing what the people want' because the insurance regulations are very popular in polls, while the individual mandate is not. The econmix blog also notes some of the similarities of the structure of health exchanges between the Dem bills and the Patients' Choice Act....but that is old fare if you have been reading this blog.

Here is a related post about community rating (not setting premiums based on risk, but standardizing them across a risk pool) and what would happen to members of Congress if they didn't benefit from community rating. Employer based coverage is community rated (in Duke's plan, same premium regardless of age or illness, thereby healthy folks subsidizing sick) but in the individual purchase market, there is aggressive underwriting because there are not large pools across which to spread risk. This is why the individual purchase market is so small (only 14 Million Americans shop for and purchase their own private insurance, out of 307 Million people).

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