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Thursday, April 28, 2016

High-Risk Pools Don't Work, Have Never Worked, and Won't Work in the Future

 Kevin Drum:

High-Risk Pools Don't Work, Have Never Worked, and Won't Work in the Future: Even among conservative voters, Obamacare's protection of people with pre-existing conditions has always been popular. ... But popular or not, Paul Ryan wants nothing to do with it:

..."Less than 10 percent of people under 65 are what we call people with pre-existing conditions, who are really kind of uninsurable," Ryan, a Wisconsin Republican, told a student audience at Georgetown University. "Let's fund risk pools at the state level to subsidize their coverage, so that they can get affordable coverage," he said. "You dramatically lower the price for everybody else. You make health insurance so much more affordable, so much more competitive and open up competition."

It's true that the cost of covering sick people raises the price of insurance for healthy people. That's how insurance works. But there's no magic here. It costs the same to treat sick people whether you do it through Obamacare or through a high-risk pool—and it doesn't matter whether you fund it via taxes for Obamacare or taxes for something else. However, there are some differences:

  • Handling everyone through a single system is more efficient and more convenient.
  • High-risk pools have a lousy history. They just don't work.
  • Implementing them at the state level guarantees a race to the bottom, since no state wants to attract lots of sick people into its program.
  • Ryan's promise to fund high-risk pools is empty. He will never support the taxes it would take to do it properly, and he knows it.

This is just more hand waving. Everyone with even a passing knowledge of the health care business knows that high-risk pools are a disaster, but Republicans like Ryan keep pitching them anyway as some kind of bold, new, free-market alternative to Obamacare. They aren't. They've been around forever and everyone knows they don't work.

See also Shorter Paul Ryan to Cancer Patients: Die Quickly from Charles Gaba.

Sorry, that's really the only headline which came to mind when I read this story...

The magic solution to the problem, according to Ryan and the GOP, is "high risk pools", which simply means separating out the sickest, most expensive people in the country and dumping them into a separate program.

With the "bad apples" (ie, human beings with terrible medical problems) safely tucked out of the way, the average cost of treating everyone else supposedly suddenly becomes less pricey.

This is the exact opposite of the entire point of health insurance in the first place...spreading the risk. In addition, as Jean P. Hall notes in this Commonwealth Fund analysis, it doesn't actually save anyone a dime...

Harold Pollack put it far more succinctly for the Twitter age:

@charlesornstein @LenMNichols @Reuters_Health high risk pools are among the very worst ideas in health policy.

— Harold Pollack (@haroldpollack) April 28, 2016

    Posted by on Thursday, April 28, 2016 at 09:23 AM in Economics, Health Care | Permalink  Comments (24)


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