Extracts:
But if insurers are forced to sell coverage to everyone at any time, many people will buy insurance only when they need medical care. This raises the cost of insurance for everyone else, in particular those who are responsible enough to buy insurance before they need it; they end up paying even higher premiums. And the more expensive the insurance, the less likely people will buy it before they need it.
That’s one reason that only five states—Maine, Massachusetts, New Jersey, New York and Vermont—have Mr. Obama’s proposal for “guaranteed issue” on the books today. New Hampshire and Kentucky repealed such laws after finding that they soon had an even smaller individual insurance market as companies fled the state.
Another proposed reform known as “community rating” imposes uniform premiums regardless of health condition. This also blows up the individual insurance market, by making it far more expensive for young, healthy or low-risk consumers to join pools—if they join at all…
New York, New Jersey and Massachusetts have both community rating and guaranteed issue. And, no surprise, they have the three most expensive individual insurance markets among all 50 states, with premiums roughly two to three times higher than the rest of the country.
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