To critics, a 39 percent hike in health insurance for some Californians foretells skyrocketing rates for the rest of us. Not so, says the company, arguing the increase only hits a relatively small number of people and the economy is to blame.
But the rhetoric from both sides distorts the reality.
It’s true that hikes like the one by WellPoint Inc. apply only to people who buy individual insurance and are unlikely to spread to the majority of Americans covered through their employers. But such hikes also hit a huge number of Americans who mostly went unmentioned in the furor – the 46 million with no insurance at all.
That’s because for most people who don’t get insurance through their jobs and do not qualify for government assistance, the only option is buying individual policies like the ones in WellPoint’s Anthem Blue Cross plan, often with high deductibles.
Raise prices, and people without insurance are even less likely to buy it – healthy people especially. Meanwhile, older and sicker customers pay more and more, running up high health bills in a shrinking pool.
Only about 5 percent of non-elderly Americans have individual insurance, compared with 60 percent who are covered by their employers. The remainder is almost evenly divided between those whose care is shouldered by government and those without any insurance at all.
Individuals who are in ill health and don’t have access to an employer-provided health insurance policy are subject to the mercies of this market, which does not work well for sick people,“ Dow said.
It blows my mind how broken this system is for individuals and freelancers. And it blows my mind even more to think that "health reform” would further entrench this employer based system for many more years.
Since we switch jobs in this modern society every 2 to 3 years, it no longer makes sense for us to leverage employers as the point of purchase. It used to make sense for our parents in the last century. But our society has moved on. But the insurance industry doesn’t want to move on since it’s much easier for them to work with companies than individuals.