Consumer’s Health Insurance Blog

The post yesterday evening by the Wall Street Journal Health Blog speaks to the model of health insurance offered in Switzerland and leads readers to consider whether this model might be applicable in the United States. There are a number of interesting facts in the blog post that help us to consider whether the Swiss model would be appropriate for the U.S.

First of all, consider that Switzerland is 1/10 the size of California, something around the size of Vermont and New Hampshire combined. But it might compare more realistically with Massachusetts, the place where the discussion occurred, and where the state has some of the same characteristics as Switzerland:

1. A requirement that everyone have adequate health insurance. Right now in Massachusetts citizens are receiving notice from the government that if they don’t have health insurance, or don’t have enough, expect to pay $219 each as a penalty on tax returns (for those who file returns).
2. Community rating. Community rating means that those that have medical conditions have a lower rate and those that are healthy pay a higher rate. This has lead to Massachusetts having the some of the highest, if not the highest rates in the nation for health insurance. Unfortunately, those with moderate incomes are priced out of the market, healthy or not.
3. Guarantee Issue. If you need health insurance, you can get it. This is fine, but due to community rating, everyone pays the same, whether they have taken care of themselves or not. Anyone can move to Massachusetts where they can buy health insurance after a short period of residency. I’m not familiar with the Swiss immigration policy, but I can’t imagine that it is as open as Massachusetts is to people moving from 49 other states, plus districts, territories, and countries around the world.
4. Control over health insurance laws. Switzerland has controls over health insurance laws, just as Massachusetts does. But due to the separation of powers between the federal and state level, most of the health insurance laws and regulations exist at the state level. While it appears to me that Massachusetts is moving towards what the Swiss are doing, the rest of the nation is taking notice at the reaction of the residents in Massachusetts.

While the Swiss model, and that of Massachusetts has appeal, many people are not participating because of the rates that they either cannot afford or choose not to pay. Will the Massachusetts penalty be enough to cause more people to buy health insurance? I believe that more people would buy health insurance if the rates were lower, and the only way to get the rates lower is to have more healthy people in the system paying in and not making health claims. We can also reduce the expense of health insurance through reduction in the cost of health delivery, malpractice insurance and claims, and overhead in the system from pharmacy to hospital to insurer to medical supplier.

Jonathan Pletzke is a consumer expert on health insurance and author of the health insurance book Get a Good Deal on Your Health Insurance Without Getting Ripped-Off, available online and at bookstores nationally. Additional details can be found at the consumers health insurance book and resources website www.BestHealthInsuranceBook.com. Copyright 2007-2008 Aji Publishing.

Tags:   Community Rating · guarantee issue · Health Insurance · Massachusetts · switzerlandNo Comments