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Health Reform Reduces Health Insurance Options for Youth in Connecticut

Guest post by: Alston Balkcom

Article Overview: The September mandates will decrease the medical coverage alternatives available for those under 19. Across the United States, many private medical insurance carriers appear to have decided not to insure those under 19 who purchase standalone policies after September 22nd. Not all companies have announced their decision on this issue, but many that have are choosing eliminate these types of policies.

Health Reform Reduces Health Insurance Options for Youth in Connecticut



The September mandates will decrease the medical coverage alternatives available for those under 19. Across the United States, many private medical insurance carriers appear to have decided not to insure those under 19 who purchase standalone policies after September 22nd. Not all companies have announced their decision on this issue, but many that have are choosing eliminate these types of policies.

Children 18 and under who apply for a health care insurance policy with at least one parent will not be affected. youth who are covered by standalone policies that were effective prior to the mandate will be allowed to keep their existing coverage.

Who is at fault here? We can fault the insurance companies. However, mandating that an insurance company to insure unhealthy people is like mandating that banks to underwrite loans for people who have unstable incomes. Congress probably more at fault than the insurance companies.

Health insurance companies do make a lot of money but their margins are very thin. They don't make tons of money on per policy. Adding just a few additional significantly unprofitable people can make them lose money or make their rates unaffordable.

A crude example would involve an insurance company that insures one hundred people against major illnesses. Each person pays a thousand and twenty dollars a year. One of the insured people has a cardiac arrest every year. It costs the carrier $100,000. The company pays the hospital and doctors expenses . It earns $2,000..

After a government mandate, they are mandated to insure five unprofitable people. Every year one of these five new people has a myocardial infarction that costs an additional $100,000. This means that the insurance carrier doubled its costs, but not its income.

If the insurance carrier responded by raising the premiums of the coverage, their policyholders might react as well. Some might drop out. Chances are the more profitable people would be much more likely to decide to end their policies. Then their rates would have to go up again and again as their ratio of healthy to unhealthy policyholders would keep moving in the wrong direction.

When an insurance company is forced to accept people without regard to their medical history, they run the risk of closing their doors. This could sound crazy to you, but big institutions go out of business from time to time.

Perhaps if the United States auto makers had been more fiscally responsible, they wouldn't have needed us to bail them out. Perhaps lending institutions should have been more prudent a few years ago and not underwritten so many soon-to-be bad loans.

A legal mandate cannot change the laws of the marketplace. If an insurance company takes on unprofitable business it will have to raise its premiums. If they are forced to raise their rates more than their competitors, they will wind up with fewer customers.

Congress wrote a law that was designed to provide universal health coverage to those under 19. This law has had not had the desired effect. Fewer alternatives for health coverage are now available for youth.

This has to make our citizens wonder if the upcoming health care reform mandates are going to work. Our lawmakers spent a lot of time demonizing the insurance companies. They are no more or less evil than institutions in any other business sector. They spent a lot of time telling us how much money they make overall. The real issue is the amount they make per policy.

We've gotten artful rhetoric and at least one lousy mandate. Let's pray that this was the only one bad mandate. Let's hope so.

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Article Tags: connecticut, health care reform, health coveragehealth insurance options, insure kids
Referred by: http://www.searchengineworkshops.com



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