I’m not pretending to be a policy wonk on health issues, just regurgitating what I read from more informed people. Some key rule proposals under Obamacare have been released.
An important one has to do with premium protection and sets criteria and boundaries within which insurers can adjust premiums. Most importantly is that the insurance is available to all comers who can pay these premiums — no denials for pre-existing conditions or denial of renewals for people who get sick. This requires a broadening of the insurance pool — the entire point of insurance is for the healthy to subsidize the sick. For more sick people, you need more healthy people (or else higher prices among the healthy people). That’s the reason for the mandate.
One of the rules would limit premium variations to 1) age; 2) tobacco use within limits, 3) family size, and 4) geography.
The factors are, with respect to a particular plan or coverage: (1) whether the plan or coverage applies to an individual or family; (2) rating area; (3) age, limited to a variation of 3:1 for adults; and (4) tobacco use, limited to a variation of 1.5:1. All other rating factors are prohibited. Thus, PHS Act section 2701 effectively prohibits several factors currently in use today, such as health status, claims experience, gender, industry, occupation, and duration of coverage, among others. Other factors that might be considered for rating purposes, such as eligibility for tax credits, prior source of coverage, and credit worthiness, also are prohibited.
Proposed rule at p. 22. A footnote says that the variations are multiplicative — for example, an old smoker could have a premium 4.5 times the base rate.
I think this kind of thing is a move in the right direction. Generally, I think we should either let people die if they don’t have enough money or provide universal coverage. A hybrid of those options tends to gravitate toward the worst features of both.