Thursday, December 30, 2010

EDITORIAL >Affordable insurance

Except in a handful of states, only a few people who have been denied health insurance by insurance companies have enrolled in the new federally subsidized plans that are written for them. 

Opponents of the new health-insurance law say that it proves that there never was much need for the comprehensive law that tries to make health insurance available to everyone by 2014.

But that is clearly not the case, as Arkansas’ own experience with the emergency coverage shows. Even with the federal help, the high-risk policies are still far too expensive for most people who have been denied insurance. The state Insurance Department, which regulates the program, needs to lower the premiums sharply even if it means that it will have to cap the number of enrollees and deny coverage to thousands who would not otherwise be eligible.

The most universally popular aspect of the law was its prohibition against insurance companies denying coverage to people with pre-existing conditions, people who contracted enduring diseases and people who discovered congenital illnesses. The only critic we ever heard about was our former governor, Mike Huckabee, who said we should feel no sympathy for people who can’t get insurance because they are victims of their own unhealthy lifestyles.

Huckabee presumably is still insured, although hundreds of thousands of people with his disease, diabetes, are denied coverage because of it. Insurance companies do not want to insure people who are apt to have major medical expenses for the rest of their lives, and who can blame them? Insurance companies are profitable businesses, not charities.

The new law will guarantee coverage for everyone in 2014 and at the same premiums as everyone else. It is a linchpin of the law because it is tied to the mandate that everyone who can afford it, purchase a health policy, usually with federal help. Insurance companies say that they cannot afford to cover people with lasting sicknesses like heart trouble, cancer and diabetes unless they also are assured a large body of policyholders who are not certain to have expensive treatments. If Republicans succeed in getting the U. S. Supreme Court to strike down the mandatory insurance, Congress would have to come back and repeal the guaranteed protection for those with pre-existing conditions.

That’s where the current dilemma comes in. Congress set aside $5 billion to help the states insure the millions of people with pre-existing conditions until Jan. 1, 2014, when they will be able to buy insurance on the same terms as everyone else. Arkansas’ share is $46 million, which is spread over 3 ½ years. Expecting a big demand, the Insurance Department calculated how much it could subsidize each person’s premiums so that the money would not run out before 2014. It obviously anticipated too many enrollees.

Arkansas is one of the states that already had a high-risk pool for such people, but the premiums were so expensive that only people with high incomes could afford them. Now, even with the federal subsidy figured by the Insurance Department, the premium cost to the individual is still too high for the amount of coverage. The annual deductible is $1,000, the premiums run to about $7,000 for many, and the sizable copays and limitations on benefits just make it unappealing.

Also, few people know about the plan, and the negative coverage of the health law in many parts of the country, particularly in Arkansas, deter many people from getting involved with it. They have heard about death panels and stories that the government would dictate what doctor and hospital you must go to and the treatment you get, none of which are true.

But the cost is the big deterrent. The Insurance Department’s super caution is understandable, but it must use the federal money to lower the premiums sufficiently to get needy people to participate, even if it means capping the program far ahead of the 2014 threshold for universal coverage and denying many the coverage they need.