Local View: How to fix health care premiums in America
Health care insurance is a business, and if the insurance industry cannot make money it will not want to participate. The insurance industry could assure itself solvency if it was allowed to establish premiums based upon risk. Why should a perfectly healthy individual with no health problems have to pay an inflated rate to cover an individual with significant health problems caused by poor choices? An individual who is morbidly obese or abuses alcohol or smokes like a chimney should not be subsidized by those who are healthier and less risky in the eyes of the insurance industry.
A multi-tiered rate structure based upon age, current health, and risk factors makes sense. An individual should be able to shop every health care insurance provider in the nation to find the best policy for his or her unique situation. Once a policy is written, it could not be canceled if the policyholder's health should change and he or she never allowed premiums to lapse. An individual with a preexisting condition would have to purchase a policy with a rate based upon their preexisting condition.
What this would do is eliminate any incentive to wait until you are sick to try to buy insurance.
Annual deductibles and risk assessments could be adjusted over time based upon age and risk in anticipation of increased costs as we age and acquire new health conditions. Pricing penalties could be imposed on those who want to wait until they are sick to purchase coverage. Government regulations could ensure no price gouging, prevent insurance companies from cherry-picking only the less risky, and make rules to prevent abuse of the insured.
I have no doubt insurance companies have actuarial tables that can predict with reasonable accuracy what a 25-year-old in perfect health would cost them if he lives to be 65 and ultimately moves on to be eligible for Medicare. By the same token, they can predict what a 40-year-old morbidly obese, alcoholic smoker who works in an automobile body shop would cost. There is no logic in these two individuals paying anywhere near the same rate for health insurance.
A system like the one I am describing would put the purchase of health insurance at the top of the priority list for every young person in the country. There would be absolutely no reason or incentive to wait to purchase coverage. There are approximately 20 million 24- to 30-year-olds in the country. If only half of them participated at a rate of $3,500 a year, the pool of money would be $35 billion available for their health care every year without regard to interest. It would be simple yet effective.
Ron Riegger of Moose Lake is a military officer, retiring in 1984 after 23 years of service, and a business operator, specializing in the manufacturing of fishing tackle.