Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds.
THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
Expert Voices
[By Staff Reporters]
In this essay Dr. Anthony Lo Sasso provides empirical evidence of the adverse selection that resulted when states adopted community rating and guaranteed issue requirements in their individual health insurance markets but did not implement complementary mechanisms to keep lower risk individuals in the insurance risk pools.
Results of Adverse Selection
Such adverse selection can raise premiums, destabilize markets and even lead to market failure through the following cycle of events:
- Community rating prohibits differential premiums based on health status, effectively lowering premiums for individuals in poorer health and increasing them for healthier individuals.
- Guaranteed issue allows people to purchase coverage when they get sick, decreasing the need to maintain insurance coverage.
- Healthy individuals respond by dropping coverage and entering the market only when they need coverage, thus the pool of enrollees becomes increasingly older and sicker.
- This adverse selection pushes premiums for all remaining enrollees higher, provoking further departures by those at the healthier end of the spectrum.
- Premiums increase again to reflect the ever-worsening risk pool of enrollees.
- The cycles continue, further destabilizing the market and potentially leading to complete market collapse.
Assessment
Dr. Lo Sasso’s findings highlight the importance of providing effective mechanisms to protect the integrity of the risk pool in conjunction with the community rating and guaranteed issue provisions contained in the SCOTUS upheld Patient Protection and Affordable Care Act.
Link: EV-LoSassoFINAL
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- DICTIONARIES: http://www.springerpub.com/Search/marcinko
- PHYSICIANS: www.MedicalBusinessAdvisors.com
- PRACTICES: www.BusinessofMedicalPractice.com
- HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
- ADVISORS: www.CertifiedMedicalPlanner.org
- BLOG: www.MedicalExecutivePost.com
- FINANCE:Financial Planning for Physicians and Advisors
- INSURANCE:Risk Management and Insurance Strategies for Physicians and Advisors
Share this:
Filed under: Health Insurance | Tagged: ACA, Advertise with Us?, Anthony Lo Sasso, Community Rating and Guaranteed Issue in the Individual Health Insurance Market, Health Insurance, Individual Health Insurance, NIHCM Foundation, Patient Protection and Affordable Care Act |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Editors
I’ve always been interested in the individual health insurance, and MSA / HSA markets, etc. Many thanks for this post.
Irwin
LikeLike
Employee Health Benefits May Go Away with thePP-ACA
[Become More Like 401K Contributions]
The Supreme Court’s endorsement of the federal healthcare law this week could spur more employers across the nation to relinquish their long-standing role as chief healthcare buyer for their workers.
http://www.latimes.com/business/la-fi-employers-opt-out-20120630,0,4778467.story
Any comments?
Bruce
LikeLike
Death Predictions
How insurance companies predict when you’ll die.
http://money.msn.com/health-and-life-insurance/article.aspx?post=462f5700-1c68-427f-9057-afe06f34f255
John Donne famously wrote “Ask not for whom the bell tolls,” but your insurance underwriter is on the case anyway.
Sherman
LikeLike