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The end of cheapo, fly-by-night health insurance and its impact on costs and coverage

Igor Volsky has a great post this morning at Think Progress that sheds a lot of very helpful light on the issue of people getting notices about cancellations and price hikes for what were lousy but cheap health insurance policies: 

“Many young and healthy beneficiaries who are currently receiving cancellation notices from individual insurers are understandably upset that they have to change policies. They like the individual plan they currently have but only because they rarely use the coverage they purchase at those attractively low premium rates. But past experience shows that the policy you think you like because you’re healthy today won’t be there when you become sick tomorrow. You may be paying a low monthly premium, but the out-of-pocket health care costs you incur after falling ill could send you into bankruptcy.

Under reform, you’ll find more comprehensive insurance in the exchanges, sometimes at lower cost than what you’re paying now. But even if the monthly premiums are higher, you’ll be paying for better care that will cover more services should you fall ill. You’ll also be contributing to a system in which everyone can always sign-up for health care coverage.”

Here’s another way to think about it:  Imagine that if, rather than requiring all of the amazing safety protections, fuel mileage standards and pollution controls that the government has gradually mandated of car companies over the last several decades, the industry had been allowed to sell lousy, dangerous and polluting cars with no such standards. Now imagine further that all of the consumer protections had been enacted in one fell swoop in 2013.

That’s similar to what’s happening now with health care. In addition to dramatically expanding coverage, the Affordable Care Act is now requiring all kinds of minimal protections that should have been required for decades but that were held at bay by lax regulations, corrupt politicians of both parties and dog-eat-dog markets. The results, of course, of this lack of consumer protection was the disastrous system under which we’ve been operating until now in which people often received the health insurance equivalent of cars that lacked seat belts and air bags, belched smoke and got 12 miles per gallon.

The new requirements will take some getting used to for some, but as with seat belts and air bags, we’ll all be better off as a result of the improved protections.

You can read Volsky’s entire post by clicking here.

9 Comments

  1. NitWitCharmer

    October 29, 2013 at 11:46 am

    It might be argued that forcing everyone to buy a Lexus means they own a better product but if they can not afford it then they will argue that they are not better off.

    Eliminating choice generally has that impact.

  2. Alex

    October 29, 2013 at 7:00 pm

    Obama blatantly lied about Americans being able to keep their current policies according to this article from Kaiser Health News :

    “For example, the IRS, Health & Human Services, Treasury and Labor had concluded in and around 2010 that under the new health-reform law, “because all newly purchased individual policies are not grandfathered, the departments expect that a large proportion of individual policies will not be grandfathered, covering up to and perhaps exceeding 10 million individuals”.
    Starting in the summer of 2009 and through 2012, President Barack Obama made variations of this vow: “We will keep this promise to the American people. If you like your health-care plan, you will be able to keep your health-care plan. Period.”
    But ever since health reform was enacted, hundreds of thousands of people have been losing their plans because they don’t comply with the new law, according to Kaiser Health News.”

  3. Alan

    October 29, 2013 at 7:44 pm

    Did President Obama lie about WMD?

  4. Alex

    October 29, 2013 at 8:32 pm

    Did Bill Clinton also lie about WMD’s ? And it’s not even relevant to a healthcare discussion Alan !

  5. Alan

    October 30, 2013 at 9:03 am

    Selective outrage, typical of the GOP.

  6. Doug Gibson

    October 30, 2013 at 9:42 am

    You’ll get to keep your Pinto, even if it blows up when someone rear-ends you.

  7. NitWitCharmer

    October 30, 2013 at 10:50 am

    I prefer my Camry to my wife’s Lexus…

    Cheaper to buy,
    more reliable,
    less pretentious,
    cheaper to fuel,
    cheaper to maintain,
    does not grab the attention of Johnny Law,
    and it is nearly anonymous.

    I suppose I like my insurance like my cars…. cheap and functional.

  8. GOP Rules

    October 30, 2013 at 4:27 pm

    Obama lied and people will die…….and one point of the headline is truly correct. Cheap health insurance is well on it’s way out. We will (already are?) wish for the days of pre 2012 health insurance premiums in the near future. Especially once the Democrats get their way and legislate out employer insurance for their single-payer goal.

  9. GOP Rules

    October 30, 2013 at 4:33 pm

    Alan/ML- it is good to see from the earlier post that you are actually two people on this board. And you seem to have the idea that I am actaully two posters on this board? Are you actually a paid Policy Watch person?

    – See: nc-medicaid-saves-taxpayers-money-and-improves-care-again