Question
Will the candidate prohibit insurance companies from “cherry-picking” only the young and healthy and denying coverage to everyone else?
The Issue
When it comes to health, there are no guarantees. You don’t know when you’ll get sick or how much health care you’ll need over time. Even those of us lucky enough to be healthy today cannot predict the future. These uncertainties are made more unsettling in the current health care system, in which insurance companies are allowed to offer coverage to the young and healthy but deny coverage to people who are older or sicker. This ability to offer coverage selectively, known in the insurance world as “cherry-picking,” puts us all at risk, both physically and financially. In our current system, insurance companies win, and those of us who happen to be sicker or older lose. Not only is this unfair, it’s inefficient.
The larger and more diverse the group of people who are insured, the better health insurance works. In a perfect system, all individuals—the old and the young, the sick and the healthy, the wealthy and those of modest means—are all insured together. This “spreads the risk” of illness in the best possible way, leaving no one to face fi nancially devastating health care bills all alone.
Currently, a few states have strong rules against cherry-picking, but most do not. What happens to those people who are denied coverage? Many states have established “high-risk pools” through which residents who have been denied coverage by insurance companies can purchase a policy. Unfortunately, as of 2006, fewer than 200,000 Americans nationwide were enrolled in high-risk pools.1 Such low enrollment may be due to the fact that premiums in highrisk pools are much higher than they are in standard insurance plans, even though the plans in high-risk pools tend to offer skimpier benefits.2 Highrisk pools may help some people in the states where they exist, but they are not a real solution for the millions of Americans who are powerless against insurance companies that refuse to sell them coverage. A nationwide rule that requires insurers to play fair, stop cherry-picking, and sell coverage to all applicants would be a true step toward making health coverage accessible and affordable for all Americans.
The Positions
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Senator McCain: Senator McCain’s health care plan allows insurance companies to continue to deny coverage to people based on their age or health. His plan also allows insurers to exclude pre-existing conditions from coverage when they do offer a policy. As an alternative to prohibiting the practice of cherry-picking, Senator McCain proposes that people who are “uninsurable” because of their age or health status buy separate insurance plans modeled on the high-risk pools that currently exist in many states. In addition, Senator McCain’s plan permits the sale of insurance policies across state lines, allowing companies to circumvent any state laws that prohibit cherry-picking. |
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Senator Obama: Senator Obama’s health care plan stops insurance company cherry-picking by creating a National Health Insurance Exchange in which all participating companies will be required to sell health insurance to every single person who applies, regardless of health or age. Insurance plans in the Exchange will cover all essential medical services, including care for pre-existing conditions, with reasonable limits on the premiums and cost-sharing they can charge. |
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Footnotes
1 National Association of State Comprehensive Insurance Plans, Comprehensive Health Insurance for High-Risk Individuals: A State-by-State Analysis (Denver: National Association of State Comprehensive Insurance Plans, 2007).
2 Ella Hushagen and Cheryl Fish-Parcham, Failing Grades: State Consumer Protections in the Individual Health Insurance Market (Washington: Families USA, June 2008); Lori Achman and Deborah Chollet, Insuring the Uninsurable: An Overview of State High-Risk Health Insurance Pools (Washington: Mathematica Policy Research Inc., August 2001). |
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