Make insurers insure people again

A coalition of Democrats and Republicans who really support small businesses is forming to make certain that you can get health insurance at every phase of your life. They should soon send a bill to the Senate that will make our health insurance market make sense.

Can you think of an industry that makes its money by avoiding customers? Doesn't that seem like a really weird concept? Well, there is one: the health insurance industry. Private insurers, like Aetna, carefully screen their customers to keep the ones most likely to have health problems out, a.k.a., "cherry picking." They look for small companies filled with healthy, young workers and offer them great plans. Then, they just rake in premiums, because even at reasonable rates they are making money because the young turks don't get sick.

They can do this because Pennsylvania permits insurers to set rates based for an employer based on the health status of its employees. So, Blue Cross & Blue Shield have to insure everyone. All the middle-aged and older workers end up with the Blues, while Aetna and others steal the healthier workers. By "steal," I mean they rob these larger pools of the healthy workers who bring costs down. That's the same trade-off we've always had with insurance. I pay in now while I'm healthy so that, in exchange, I won't have to pay in so much when I'm older.

That's not how it works anymore. Click "Read More" to find out what legislators are trying to do about it.

Rx4PA: House Bill 2098 would do for Pennsylvania what Medicare has done for everyone

The Pennsylvania AFL-CIO is pressing legislators to pass HB 2098, a bill submitted on December 6th and sitting before the House Insurance Committee (authored by its chair, Rep. DeLuca). We were all a little disappointed earlier this year when the legislative process failed to make good on Governor Rendell's plan to allow our insurers to quit paying for infections and mistakes made by Hospitals. Then, the next thing we knew, Medicare (by far the biggest spender in Healthcare) came along and said it wasn't going to pay for those mistakes or infections starting late in 2008, anyway. Which could have nearly the same effect, so HB 2098 seeks to give our Pennsylvania insurers that same right: to refuse to pay bills for procedures correcting conditions that hospitals should have prevented.

"But wait! I thought we already solved this problem?" you ask. Sure you do. We did something about it, but we sure didn't solve it. In fact, in one very important way, we took a step backward. A big step. Click Read More to see what I mean!

Rx4PA: HB 2005 clears its first committee hurdle

HB 2005 came out of the House Insurance Committee this week. It's a bill that Rep. Deluca (D-Pittsburgh) wrote that finally gives us some control of the health insurance industry. Imagine: up to this point, car insurance was better regulated than health insurance. That's like telling a kid not to run with scissors but letting him play with your guns. That could end. Word on the street is that they'll get HB2005 to the floor by the end of the year. That would be good.

Of course, lobbying and politics made it all more complicated than the had been initially planned. I'm not going to put the text of the bill in here, but here's the deal: small employers get nailed on their premiums all the time. Let's say we've got a plumbing company, right? We'll call it Dan & Ray's Plumbing. You've got this great plumber named Jen, and Jen's been working with you for years. Great gal. Works hard. She's in her late 40's. The doctor tells her that she needs a double-bypass. Big bill to your insurance carrier. Suddenly, we're paying a lot more money for all our plumbers, all our shop assistants and all our administrative staff. Premiums can spike like crazy because one of your crew had the audacity to get sick. The nerve.

Sickness is no good for insurance company profits.

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