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POLICY/HEALTH PLANS: Stronger Rules Sought on Association Health Plans – Los Angeles Times

Following up the post about the Shadegg legislation which would allow people to buy health insurance across state lines, the other shoe dropping in the Congress is the approval of Association Health Plans — legislation passed in the House and now en route to the Senate, which basically will allow associations of varying stripes and ethical fortitude to offer health insurance across state lines also without having to adhere to state regulations. These are descendants of the Multiple Employer Welfare Trusts of the 1980s, which were essentially a license to print money for organized crime.

Consumer groups in California are prepping for these early, trying to get their retaliation in first, and are finding a willing audience in Insurance Commish John Garamendi.

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8 replies »

  1. Rick,
    You write, “And what was the methodology of the study from which this 37% statistic came? How many of this 37 percent were newcomers to the insurance market (e.g. college graduates getting their first job with benefits).”
    A health insurance application will ask if the proposed insured has current coverage. They can answer Yes or No. They add up these answers I assume. This is not a complicated issue.
    Also, if a student has just graduated from college the same question will be asked. If the student had insurance as a dependent on their parents plan they will say, YES they have coverage and will not be counted as an uninsured person. Here again this is not complicated. I will point out that many colleges require health insurance to attend classes.

  2. I’m trying to get come context from the eHealthinsurance study…..bu I agree with Rick. The uninsured turn over rapidly as a group….and their overall numbers are not going down. Two nuggets that suggest that HSAs wont do much to change things. Meanwhile only 1,000,000 HSAs have been sold, which means that only 300,000 if them (if we believe the Galne Institue) went to the previously uninsured of whom there are 45 million — so at this point it’s a rounding error.
    On the other hand I think that for an individual to have a high-dducitible plan is better than for them to have nothing. I just think it’s bad public policy.

  3. Sorry, Ron, but I like my statistics with a side helping of context. Before there were HSAs, how many uninsured people were newcomers to the insurance market every year? And what was the methodology of the study from which this 37% statistic came? How many of this 37 percent were newcomers to the insurance market (e.g. college graduates getting their first job with benefits). Without context, I can make the argument that getting a job with benefits is the answer to the problem of uninsurance. But we all know how you feel about that. Really, we do.
    Your standalone statistic, without context, means little.

  4. theorajones, 37% of HSAs had no previous insurance. You and Matthew think these uninsured people are rich, figures.

  5. For comparison: 67% of the uninsured make less than $50k. Furthermore, the median income in the us is about $43k–fully half of all people make $43k or less a year.
    So, fully 71% of the people buying this insurance are better off than the majority of us. And most of the people who are buying this insurance already have insurance–they’re just trading in for a better deal.
    Your own stats support the argument that this is basically a boondoggle for the well-off and the healthy.

  6. Yep, those Federal legislators want their family and friends to have more tax shelter options. This is class-based pork.

  7. Garamendi is a Democrat who is very uninformed.
    Setting Garamendi Straight
    8/11/2005 11:04:00 AM
    By Grace-Marie Turner
    Insurance Commissioner John Garamendi grabbed the spotlight this week by blasting Health Savings Accounts (HSAs) in his latest report “Priced Out. Health Care in California” while stressing his demand for a universal, government-run health care system.
    But his accusations against consumer-directed health care (CDHC) products are not backed by actual experience of people in the plans. Some examples from his report:
    o Consumer directed plans “put the entire health system at risk,” Garamendi says, because they attract the young and healthy into leaner plans, leaving the older and sicker in traditional plans.
    In fact, Assurant Health, which sells HSAs and other health insurance to individuals and small groups, found that 29% of its HSA policyholders had incomes of less than $50,000. In addition, 57% were over age 40, and 73% were families with children, closely reflecting purchasers of traditional health plans.
    Importantly, America’s Health Insurance Plans, the trade association of health insurers and health plans, found that 37% of those purchasing HSAs were previously uninsured.
    http://www.galen.org/statehealth.asp?docID=824
    The large insurance companies of CA can go crying to Garamendi to stop Association Health Plans but he can do nothing to stop Federal legislation, sorry.
    Besides, health insurance is interstate commerce and should be regulated by the Federal Government.
    The problem with the Democrats is that they have no ideas about health care. Lucky they are a minority and the President has a mandate from the American voters.

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