Big Lies

[David Horn]

(02-17-2017, 01:06 PM)Mikebert Wrote:

(02-16-2017, 03:03 PM)David Horn Wrote:

(02-16-2017, 07:50 AM)Mikebert Wrote: Question for Classic,

You purchase your own insurance and have for years.  Until a few years ago you were in the old market, and you favor going back to that.    Suppose you or a dependent experienced kidney failure and had to get a new one (The is has happened to three people I know, so its not super uncommon).  For the rest of their lives they will have to take anti-rejection meds that I understand run like 30K annually.  

So if this happened to you, assuming your premiums were less than 30K, you would become a continuous loss to the insurance company for the rest of the time you had a policy with that company. I assume that private plans like yours have a fixed duration and you have to sign up again when the plan expires. Why would they agree to insure you?  Why would anyoneinsure you, unless they could charge more than 30 K in premiums?

Surely you must have researched this.  What would happen if this happened to you?  I honestly don't know. I have had a corporate plan for my entire working life.

Most policies of that type have caps that prevent excess losses by the insurer.  Caps can be rather low for plans that cost less, so a plan with a lifetime cap of $500,000 would run up against the cap just paying for the kidney.  $1,000,000 caps were common; $10,000,000 were rare.  The ACA has no cap.

I am aware of the caps. Say this happened and in the first year you racked up $150K in surgical expenses and 15K for six months of anti-rejection meds (165 K total).  By the end of the year you have completely recovered from the surgery and are back to work and living your regular life.  Now comes the time to sign up for next years insurance.  Your insurance company knows you are going to result in at least 30K worth of losses for them until you reach the 1 million cutoff--and they are out another 835K.  I would think they would refuse to renew your policy, and no insurance company would take you as a customer because you are a sure loss for them.  Why wouldn't this happen to you?

I understand how employer (group) insurance works.  The policy is an employer who purchases a policy that covers a group, say 1000 people.  When something like this happens the insurer has no incentive to refuse to drop the policy, because they would be giving up $10 million in revenue to save 30K. But with an individual by refusing insurance they give up 10K of revenue to save 30K, and come out ahead. 

Based on your response, it appears this doesn't happen in your case.  Why not?  Seems to make business sense for the insurer.

Those are all good points, and the answer to your central question (do they get to be insured after a major illness) apparently rested with each state's insurance law and their insurance oversight board.  When I looked into it briefly, it was all over the board, with some states that should have been really strong among the worst offenders.  California is a prime example.  I don't know what Michigan's laws and enforcement were, but you might.

I live in Virginia which is extremely business friendly.  From what I've been told by friends who had OTC health insurance, you could buy the right to not be dropped, but you had to be on the same policy for a few years.  Of course, prices could rise, but how fast was controlled somwhat by the oversight board.  In all, middle-of-the-pack guarantees.  Most of those folks want that system back, but also admit they never needed to use their insurance for anything serious enough to be an issue.

Like you, i was on a corporate plan of some kind for most of my working life.  Now, I'm on Medicare.  Everything I have on this is based on some old research I did years ago and anecdotal eveidnce from some self employed friends.