Last week, we told you about the Pre-Existing Condition Insurance Program (PCIP), a program designed to provide insurance to high-risk individuals and those denied coverage. This week we tell you why we think the experience with the PCIP program may be indicative of problems to come once guaranteed issue goes into effect.
We view the major gap between what was intended and the actual result of the program thus far as a bit of foreshadowing for some of the inadvertent outcomes that could occur when guaranteed issue becomes the law of the land in 2014. In the current high-risk pool environment, the healthier populations (although quite sick) forego coverage because the value proposition is not there or premiums are not affordable. Fast forward less than three years from now. The high-risk pool individuals come into the general marketplace as will those foregoing coverage there now. They force premiums up for all, resulting in some segments of the population — the young and healthy and those barely paying the premium right now — to drop out. Add the expected huge additional costs of the mandated essential benefits of PPACA, and the situation only grows worse.
Proponents will argue that is why subsidies are built into the law. But as we have noted before, the subsidies are lackluster as incomes increase to 250 to 400 percent of poverty — the same populations that rely on affordable individual coverage today.
We are not arguing that we don’t need solutions to the uninsured situation. We only worry that massive regulation in the form of prescribed benefits and guaranteed issue will have negative outcomes that don’t often get talked about.
The high-risk insurance program and the insurance market’s reaction last year to the decision by the Obama administration to accelerate guaranteed issue for children via regulation are harbingers for what is to come.
The mainstream media have gone to great lengths to feature human interest stories about those who have benefited from the changes PPACA ushered in. And we do believe there has been some good that has come from this law. But where are the hard-hitting analyses about the need for reform of health reform? And will the stories be written if the unintended consequences set in?