05 April 2007

Young invincibles don't need Wellpoint

Infuriating article in New York Magazine on New York's "young invincibles," which is the health insurance industry's term for 20-somethings who make the very rational choice not to buy health insurance to cover themselves and line the pockets of a very profitable industry.

It was a painful article to read, as it opened and closed with the story of Andrew Ondrejcak's bout with appendicitis. He survived.

Paul should have survived too. Would have, if there hadn't been an entire series of screw-ups and wrong judgments at the hospital.

"We trusted them," Sarah told me afterwards. "We trusted them."

Paul had evidently been on some kind of campaign to convince her to be more trusting of people — to assume the best of others. That is the kind of guy he was.

The New York Magazine article is infuriating because it draws absolutely the wrong conclusion about what to do about all the uninsured 20-somethings out there.
The common assumption is that the exorbitant rates are schemed up by the politically influential executives governing the trillion-dollar insurance industry. But if insurers could target cheaper plans at younger New Yorkers, they would: Every business thrives by exploiting untapped markets. State law, however, requires insurers to follow a “community rating” system that throws everyone—young, old, sick, healthy—into one risk pool. “The whole point of insurance is that you’re pooling the risk to spread out the costs for everyone,” explains Cunningham. “If you target healthier groups with favorable policies, you’re likely going to make it more expensive for the older, less-healthy populations who need regular care.” Of course, if the young and healthy don’t buy policies at all, who’s balancing the costs? Recognizing this Catch-22, some states have adopted a more flexible “age banding” system, allowing insurers to customize packages based on age. WellPoint recently created a youth-centric program called Tonik, with plans as low as $67 a month, but it’s currently only available in eight states.
So things are fine in those eight states.

Wrong. In those states there's still a third of U.S. healthcare dollars not going to healthcare, but instead to duplicated administration, obscene CEO salaries, profits, and marketing. People in those states still pay, per capita, twice as much for healthcare as do people in other countries, and there are just as many left uninsured or with crappy insurance packages. I haven't googled "Tonik," but would bet that it's a junk policy, with a high deductible, lots of co-payments, and a fat premium increase if it turns out you have anything wrong with you. In other words, if you might need care.

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