Health reform push is about the pool

Nancy Marshall-Genzer Feb 19, 2010

Health reform push is about the pool

Nancy Marshall-Genzer Feb 19, 2010


KAI RYSSDAL:We’re going to hear from the president about health care sometime in the next couple of days. He’s hosting a big meeting about it next week. One key element that is expected to be in the Administration’s latest proposal is going to sound familiar to you — individual mandates, a requirement that everybody has to have health insurance, whether they think they need it or not.

Marketplace’s Nancy Marshall Genzer explains it’s all about something called the pool.

Nancy Marshall Genzer: The White House and Congress want to know why insurers are raising premiums so much. They point to the giant insurer WellPoint; it wants to hike rates in California by as much as 39 percent.

Vivian Ho: Affordable insurance is dying in a death spiral.

Vivian Ho is a health economist at Rice University. She says the big premium increases are for individual insurance policies. That is, for people who don’t get insurance through their jobs, and have to buy it on their own. Ho says premiums are rising because more healthy people are forgoing expensive insurance. She says that leaves insurers with too many sick people in their pool of customers, and not enough healthy people who pay for insurance, but don’t need care.

Ho: Economists call it a death spiral, because eventually, the premium costs are so high that only sick people are involved, and then, they can’t even afford to buy health insurance either.

The problem gets worse in a tough economy. People lose their jobs and their insurance. And, if they’re healthy, they often decide to do without coverage.

Cathy Schoen is senior vice president for research at the Commonwealth Fund, a nonprofit research group.

Cathy Schoen: Insurance is, for most people, not affordable if they’re paying on their own, at a time when they’ve lost their job and their income.

Insurance companies don’t support the health care bills in Congress. But they do like one element of the proposed health are overhaul: requiring an additional 30 million Americans to buy health insurance.

Robert Zirkelbach is a spokesman for America’s Health Insurance Plans, the health insurers’ trade group.

Robert Zirkelbach: What we need to do is find a way to get everybody into the health care system. That’s the only way the market reforms can work.

Zirkelbach says, premiums will stabilize if young and healthy people are required to buy insurance. That would help pay for the sick people in the health insurance pool.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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