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Visit a business any place in Colorado and people
have plenty to say about the skyrocketing costs of
health insurance.
Employers are frustrated because they want their
employees to have access to quality health care but
can no longer absorb annual premiums increases of 15
to 70 percent. So, employees, asked to share the
rising cost of premiums, are unhappy, too.
While most people on Main Street don’t have time to
figure out what’s wrong with Colorado’s insurance
market, they do have time to tell legislators that
they expect us to deal with the problem this year.
The problems contributing to our health insurance
chaos were created by well-intentioned legislators
who wanted help a particular group, but in doing so,
they loaded additional costs onto all health care
consumers.
While the health insurance market suffers from a
multiplicity of factors which either drive up costs
or shift costs from those who receive care to others
who pay the bill, three elements must be addressed:
Community rating.
Prior to enactment of “community rating,” premiums
were directly related to the health of each person
purchasing insurance.
Legislators enacted community rating in order to
protect small business from wildly fluctuating
premiums and to keep insurance affordable for
consumers with existing health problems.
Unfortunately, this replaced wildly-fluctuating
costs with rapidly-increasing costs and
disproportionately shifted costs to healthy
consumers, causing many to simply leave the market.
Look at it this way: You and I go to lunch together
everyday. Both of us pay $10 for lunch, but
everyday, I get an $18 steak and you get a $2 cheese
sandwich. How long are you going to subsidize my
steak and be satisfied with your cheese sandwich?
That’s the predicament which community rating
imposes upon healthy consumers.
And it gets worse, because when healthy consumers
leave the market, the high-risk consumers who remain
now must bear an even higher cost.
We
must allow insurers to offer a “good health
discount” to attract healthy consumers back into the
market.
Mandates.
Everyone who purchases health insurance through the
small group market in Colorado is required to pay
for 17 mandatory coverages.
For example, everyone is required by law to purchase
pregnancy and maternity coverage – that’s everyone,
including men and women who are beyond child-bearing
age. And everyone is required to pay for child
health supervision services and for mental illness.
Colorado law mandates virtually the best coverage
money can buy. Trouble is, few people can afford it.
It’s time for legislators to trust consumers to make
their own choices about what their family needs and
can afford. Consumers who can’t afford every
conceivable coverage are clearly better off with a
basic policy than with no insurance at all.
Litigation costs.
Runaway juries awarding lottery-style judgments are
making medical malpractice insurance unaffordable
for doctors in several states, causing physicians to
refuse to perform certain high-risk procedures or to
leave for states with liability limits.
Colorado reacted to a medical malpractice crisis in
1998 by limiting non-economic damages -- including
pain and suffering, emotional stress, inconvenience
and quality of life -- to $250,000, except in
extreme cases. Injured patients are still entitled
to fully recover medical costs and lost earnings.
Recently, the Colorado Supreme Court began to chip
away at those limitations. Though juries may feel
justified in awarding millions of dollars to a
sympathetic victim, consumers ultimately pay the
bill.
Colorado must head-off another medical malpractice
crisis by re-affirming the limitations which allow
injured patients to be compensated but limit runaway
verdicts.
Sen. Mark Hillman (R-Burlington) represents 12
counties on the Eastern Plains and served on the
Health Care Systems Interim Committee. Please see
also: http://www.markhillman.com.
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