You’re not exactly surprised are you? A Commonwealth Fund Study Says Individual Insurance Too Costly
The overwhelming majority — 89% — of working-age adults who shopped for health coverage in the individual market over the last three years were rejected for health reasons or found it too expensive <SNIP> Coverage was not affordable for 58% of the applicants, and 21% who had a medical condition were turned down, charged a higher premium or sold a policy that excluded the existing problem from coverage, the report said.
But don’t worry—that bastion of pure unadulterated research AHIP has its own study:
America’s Health Insurance Plans, an industry group, took issue with the study and its methodology — a telephone survey of more than 4,000 consumers — saying their impressions were not as reliable as the trade organization’s survey of insurance companies last year. The group also pointed out that its survey showed that 16 million people had individual health insurance and that the policies they purchased were more affordable than the Commonwealth report suggested and with richer benefits than employer-sponsored coverage.
Are they really saying that “individual health insurance policies are more affordable” AND have“richer benefits than employer-sponsored coverage.” Even on an acid trip there’s no way that Karen Ignagni and her lackeys can keep those two thoughts in their head at the same time without smoke coming out of their ears. I mean I know they’re well versed in lying but that one is about as stupid as possible. If only because by definition the distribution costs of selling individual policies massively exceed those of group policies. If they’re “more affordable,” it’s because their benefits are lower. And yes the benefits of most individual policies are worse than those of group policies, and most of them are consequently cheaper on an absolute dollar basis. But on a “dollar per benefit” scale they cost more. . Just one tiny study from Gabel and co in 2002 proving this is here
And that’s not even counting the fact that insurers underwrite the crap out of the individual market. AHIP’s own release confirms that “Of those applicants offered coverage in the individual market, more than three-quarters received their requested coverage at standard rates, while 22 percent were offered full coverage at higher initial premiums. Only 1 percent of offers included a coverage exception for a specified condition.” In other words the 20% of people who were potentially sick were underwritten. Duh! (And of course they don’t count people who were completely rejected, so their not bothering with the relevant denominator).
But back to the LA Times article. Please, please tell me AHIP’s being misquoted (and to be fair their own press release doesn’t quite say what the Post says they say), and that they meant “or” not “and”? Well let’s see—in a riposte to the paper I linked to in the previous paragraph which suggested that the individual market was poor value in Health Affairs back in 2002, this was written:
Administrative expenses are much higher for individually purchased insurance. Since each dollar of health insurance protection costs more in the individual market, it is not surprising that consumers in that market buy less of it
This is logical. It also would appear to completely agree with my point and rubbish the quote from the AHIP
lackey research director in the LA Times. So who came up with this powerful and insightful analysis? It was Donald A. Young and Thomas F. Wildsmith. And who were they?
Donald Young is president and Thomas Wildsmith is a policy research actuary at the Health Insurance Association of America in Washington, D.C.
HIAA merged with GHAA to form AHIP shortly after that was published. Pity they didn’t bring their research team with them. At least they had some vague standards of honesty when they debated their corner back then.
CODA: By the way, I’m not exactly thrilled with any study done on the individual market. Even the massive RAND one in California had several flaws as I pointed out here, but no one in their right mind should trust anything AHIP says on the subject.