Desperately Seeking Health Insurance

I spent the weekend in rural New Hampshire, and had occasion to talk with a friend about his elusive quest for affordable health insurance.

My friend has worked hard all his adult life. He is self employed. Shortly before his 60th birthday he had a joint replacement. When he went to renew his health insurance for himself and his wife he was told that his monthly premium would double - from $1,200/month (bad enough) to $2,400/month (impossible). If he took coverage with a $10,000 family deductible he could keep the premium at $1,200/month. He was told that the 100% rate hike was due to having had a joint replacement prior to turning 60.

In our market-based health system self-employed people seeking insurance as individuals are up the creek. The basic nature of insurance requires companies to assess the risk they are taking on. If I chose to go uninsured until I am diagnosed with cancer it's fair to make me pay a hefty premium to make up for all the years I didn't contribute to the insurance pool. But what about my friend in New Hampshire?

It could be that an actuarial algorithm predicts that a person who has had a joint replacement before 60 becomes twice as risky to insure. But even if that's the case my friend has not been a free rider - he's been paying his part of the insurance pool year after year. A system that requires him to double his payment because of the treatment he needed is unjust, even if the insurance company and its actuarial practices are on the up and up.

Even if every insurer used actuarially fair methods to estimate risk it's simply wrong for individuals to have to pay more for their insurance because of their health status if they have maintained their insurance over time and were not simply waiting until a need for care arose. But I'm afraid that as our national discussion of health reform proceeds we'll fall into our familiar pattern of blaming individuals for not "putting enough skin into the game" or insurers for greed and profiteering.

Individuals and insurers both misbehave, but it's our system itself that's mistreating my friend. If we - the body politic - allow it to continue as it is, we'll have to point the finger of blame at ourselves.