Sunday, February 19, 2017

Let’s Make Health Insurance Legal Again

Last month, Congress approved a budget that set in motion the plan to repeal the Affordable Care Act. Using an arcane Senate legislative rule called “budget reconciliation,” this allows repeal of enough of the ACA to bring it to its knees. But until and unless additional legislation is passed, the ACA’s regulations of health insurance will remain in place, and people will continue to suffer.

With the implementation of the Affordable Care Act in 2014 an effective ban on many forms of health insurance policies went into effect. Until then people were able to purchase any type of insurance policy that an insurance company was willing to sell them. Insurance companies were free to innovate and create new products.

For example, a new invention, “health status insurance,” was already sprouting up in the marketplace. This allowed people to insure themselves against the costs of developing a medical condition that would render them otherwise “uninsurable.” The ACA banned it.

This kind of ban stalled innovation that has been present in the insurance market since it first started. Insurance was developed in London in the 17th century, offering a way to spread the risks of unforeseen, unpredictable, highly costly events from an individual or business to the larger community. Insurers were able to design and actuarially calculate the price — based upon statistical risks — of an insurance policy to suit virtually any imaginable occurrence. The advent of the ACA, took many of these specialized policies off the table.

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