Monday, February 22, 2010

Healthcare Debate - California Death Spiral

For the 800,000 Californians who buy health insurance on the individual market, the announcement indicating that they should expect rate hikes (in some cases, as high as 39%). Anthem Blue Cross (WellPoint) claims that the rate hikes are not "profiteering"; instead, they are necessary because the company is facing a classic insurance death spiral.

The author of the article posted on the New York Times website today offered an interesting perspective on the argument that states we need a national healthcare solution:

"...some claim that health costs would fall dramatically if only insurance companies were allowed to sell policies across state lines. But California is already a huge market, with much more insurance competition than in other states; unfortunately, insurers compete mainly by trying to excel in the art of denying coverage to those who need it most. And competition hasn’t averted a death spiral. So why would creating a national market make things better?"
Just something to think about when the guys up on the Hill start talking about healthcare again...