The Health Care Reform Secret that will Lower Premiums: Community Rating!

Here's something I could have told you 40 years ago:

NY Times: Better health doesn’t seem to explain why so many young people forgo health insurance. Rather, income does, according to new survey data released by Gallup.

One interesting point about the current "you're on your own" Republican theory of health care reform: No one has asked Republicans to drop their current government plan for their proposed market driven one. They did this to the Democrats. Funny isn't it. Any tea party protesters want to pose that question at your next town hall? crickets…crickets…crickets.

ALERT! YOU MUST KNOW THIS: All Americans should understand what a "community rating" is. Republicans don't want you to bother with this "trivial" concept, but lowering your health care premiums depends on it. (Yes, Democrats should have been shouting about this all along. Hell, I didn't connect the dots.) “Community rating” refers to the practice of charging a common premium to all members of a heterogeneous risk pool who may have widely varied health spending for the year. It inevitably makes chronically healthy individuals subsidize the health care used by chronically sicker individuals. The purpose of any insurance, of course, is to do precisely that: redistribute the financial burden from the unlucky to the lucky members of a risk pool.

NY Times- Uwe E. Reinhardt an economics professor at Princeton writes:

In virtually every industrialized country outside the United States, the contribution people make toward their health insurance is divorced from their age and health status. While this arrangement — known as community rating — is taken for granted abroad, it is still astoundingly controversial here in the United States. All the more astounding is how many (Republican Senators in Congress) who oppose community rating on principle nevertheless are themselves already beneficiaries of community rating … their health risks pooled (Senators average age 63) with other federal employees (average age 43)… younger federal employers routinely subsidize older senators.

Senator Michael Enzi, a Republican from Wyoming, argues strenuously against community rating … (Arguing that it) forces insurers to charge near uniform rates regardless of health status or habits, drives up health insurance premiums … costs inevitably rise when insurers aren’t allowed to price based on risk.

Close your eyes now and imagine … hearing Senator Enzi’s cry of despair … (after finding out) a requirement that all senators must purchase their health insurance with the premium based on (age and health status) … Can you imagine the fiery oratory … in the august Senate chamber? … the 2010 Blue Cross plan for federal employees cost $6,791 for individuals and $16,124 for families. Were the senators treated as a separate risk pool (just like most Americans), their comparable premiums would be $14,000 for an individual and $32,000 for a family … community-rated … over all 100 senators.