Reinsurance has uses in fixing health care but this is not the way to attack the uninsured issue. This is a back end way of trying to make risk-adjustments. That is crucial in getting the health insurance market to work right. The devil is in the details. When does the reinsurance kick in? Is it 100% or a high cost share? What happens when a plan enrollee hits their aggregate coverage limit? Where is the government's stop loss amount? How would it work with HMO's that, unlike fee for service, don't have specfic claim amounts per procedure? Reinsurance makes sense in trying to promote managed care plans in rural areas where it is difficult to get the number of enrollees needed for some predicitability in claims. This is an aspect of Florida's Medicaid Reform. But it's not the best way to reduce the uninsured in the private market.

A better plan is to expand the credit portion of this proposal and, more important, risk-adjust it. This will allow those with the worst health conditions (and highest plan premiums) to purchase insurance. It will also lead to the development of "special needs plans" that simply market to those with multiple chronic conditions.

• posted by Mike Bond
• February 1, 2008 @ 12:24 pm
• Permalink

Post Your Comment Here

Name		*
E-mail		*
Response		*
Enter the characters as they appear in the box to the right		*
		* = Required field