Sunday, October 12, 2014

Plus One

It’s closing in on open enrollment season for health insurance.  In the near future my employer will be offering a new option – plans for “self plus one.”  Self plus one is great for couples with no dependents or single parents with one child.  However, as with any policy change there is not only winners, but also losers.  For example, when the Affordable Health Care act raised the age for dependents on a family policy to 25, many young adults benefited; however, someone has to pay for the “extra” cost associated with this change and that would be the policy holders of the family plans.  Unfortunately, more bad news for family policy holders as adding a “self plus one” option is likely to raise family health insurance once again.  The reason for this expectation is mathematically simple – on the average it is likely to cost less to pay for the health care costs of 2 people than it would be to cover the health care costs of a family of say 19 such as the Duggars (or for that a family of 3 or a family of 5 and so forth).  Thus, when these units of 2 are removed from the pool of insured families, the remaining higher costing units must be divided amongst fewer policies.

On the surface, this may simply appear to be a matter of equity; simply stated, “Why should a family of 2 have to pay for larger families?”  But what is a fair share?  Beneath the surface, rages many burning social policy issues.  For illustration, let’s start with the most obvious.  If we are going to pull out the families of 2 to spare them from subsidizing the cost of a family policy, then what about the families of 3?  Why should families of 3 be left to subsidize those with 4 or more family members?

Further, if the reason for this change is based on the concept of paying your fair share with more expensive subscribers paying more for insurance and less expensive paying less, where do we draw the line?  Already, under the Affordable Health Care act, smokers are identified to pay a premium under this principal to pay their fair share.  What happens when this gets pushed into the workplace?  Do we then have six categories – Single, Nonsmoker; Single Smoker; Plus One Nonsmoker, Plus one Smoker; Family Nonsmoker (what happens when some smoke and some don’t?), and Family Smoker.  And if the barn door has been opened to charge smokers more for health insurance, does that in turn open the door to charging more to policy holders based on Cholesterol level, Obesity or Type II Diabetes?  If we open the barn door to rating premiums on these conditions, do we make exceptions for individuals whose affliction is a result of genetics such as a thyroid condition versus a lifestyle choice?

Since we’re having fun with trying to make those who use the most health care pay accordingly, maybe we need to also broach the issue of whether health insurance rates should be different based on sex.  Hadley Heath expressed such a perspective in her posting, “Women Should Pay More for Health Care”.  If you want to read some passionate commentary, read this post and then read the responses from readers.  While some in New York may find this proposal preposterous, apparently it is happening in some states.  I’ll also note in my role as an advocate for the oppressed male in America, that it is common, accepted practice to charge males more for both life and auto insurance policies so there may be merit in asking if insurance is based on risk, why is gender ratings acceptable in one instance but not another.

I am very concerned that our attempt to deliver health care through health insurance is taking us down the wrong path.  Health insurance is not the same thing as health care.  Trying to fine tune who pays and how much they should pay will likely become as abstract as our income taxes.  Indeed, the Affordable Care Act was judged constitutional based on the government’s taxing authority so it is not such a wild assertion that health insurance in America has become our new hidden tax.  It is somewhat ironic that we have long criticized China for its one child policy yet in many ways we are using different means such as “plus one” to arrive at the same end.  When it comes to health care, perhaps instead of 2 Americas we may be moving toward 3 Americas whereby the wealthy continue to be able to afford health care and the poor are provided for through public assistance while the working middle class is left largely to fend for itself.  Call me a socialist all you want, but when it comes to basic health care I don’t want it left to the spoils of a capitalist insurance regime.