None of us has health "insurance," really. If you develop a long-term condition such as heart disease or cancer, and then lose your job, divorce or outgrow your parents' plan, you can lose your coverage. You now have a pre-existing condition. Insurance will be enormously expensive if you can get it at all. This can happen to anyone, with devastating consequences.
Most proposals, including the Obama campaign plan, try to regulate this problem away.
Regulations reduce competition. That's not an unintended consequence; reducing competition is in many ways their central point. Regulators feel that if insurers can compete freely, insurers will grab the healthiest customers, leaving no one to cover the expenses of people with long-term illnesses.
The key innovation is "health-status insurance." If a health shock causes your medical-insurance premiums to rise, it pays a lump-sum payment sufficient to pay the higher medical-insurance premiums.
Posts
