Nothing is more frightening than a bunch of Washington, D.C., politicians/lawyers attempting to interfere in free enterprise, especially when they know nothing about the subject. In this case it is health insurance. It is obvious that none of them has ever heard of adverse selection.
Adverse selection can apply both to health insurance companies and the public attempting to buy their product. Health insurance, like fire insurance, is a risk business. A fire insurance company can refuse to insure your house if the bathroom is on fire. Everyone understands that. A health insurance company can refuse to insure you on an individual policy if you have cancer. Here is where the understanding ends and liberals go nuts.
If a health insurance company raises your premium you can “select” against them two ways. If you are healthy, you can go to another company. If you have become unhealthy, you can stay with the company, leaving it with a lot of unhealthy, expensive clients. Adverse selection.
With President Barack Obama’s unaffordable health care fiasco, young people will choose to pay the fine instead of buying into the plan, knowing that if they ever get sick they can buy into the plan without getting rejected. Adverse selection.
Not only will the healthy not be paying premiums to build up a reserve from which claims are paid, the plan will end up with a lot of sick people, forcing the Obama plan to raise premiums – something we predicted.
During my 40 years selling health insurance, I have always contracted with well-reserved – filthy rich – companies. I have never had to call anyone to tell them there was no money to pay their bills.
I truly believe that Obamacare will collapse upon itself – unless the Republicans get the courage to end it and let free enterprise prevail.
Joel Olinghouse, Hamilton