November 20th, 2009:

Re:  Setting Premiums for Publicly-Subsidized Healthcare Coverage – Additional Concerns | The Moderate Voice

POTENTIAL OVERCHARGING FOR POLICIES COVERED BY PUBLIC SUBSIDIES

Will future private health insurance premiums reflect discrimination against covered individuals based upon their credit ratings, zip codes and other unlucky factors? These are not clearly prohibited in current health reform legislation. If they are not prohibited, one can rest assured that insurance companies will use these differences to price policies accordingly. Since many poor people cannot afford health insurance already on the basis of current premiums, after healthcare reform is enacted, will those premiums be raised on such factors and will the public subsidies also be unnecessarily increased to cover such insurance discrimination?

This author raises a very pertinent question about how the subsidy program for those who are eligible for and choose the public option would behave according to how insurance companies set premium rates today. My understanding of the bill is that they cannot deny coverage or charge more for premiums due to pre-existing conditions. But does the bill properly regulate the insurance companies’ underlying policies concerning risk evaluation relating to premium price?

For example, does the bill have language that regulates the inclusion and consideration of a potential customer’s credit rating, work history, neighborhood, marital status, home ownership, and other social factors when determining the price of the customer’s premiums? We all know that insurance premiums have somehow been connected in the past few years to our credit rating and other non-health related circumstances.

The author asks the question about how a person who is otherwise healthy, but has poor credit and recently lost a job, could be charged more for premiums than a person who isn’t so healthy but has good credit and makes more money.

My question is, could the health insurance companies – after reform is passed – be able to adjust premiums upward based on social, bad credit, or other factors to increase the amount of subsidy received from the government just to cover losses from covering the unhealthy? Passing on costs to consumers when times are hard but keeping enormous profits when times are good is the mantra of today’s capitalism.

It is going to be shocking when we learn just how much money we are paying the insurance companies to provide coverage for the sick and poor and less fortunate.

Insurance companies will delight in high subsidies because selling subsidized policies will guarantee profits. I’m sure that the insurance industry will find a way to offset their losses from insuring the sick by circumventing the legal language in the bill to artificially raise either  premiums or subsidies. How can they not like health reform?

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