Friday, August 14, 2009

"Guaranteed Issue" and the consequences

Amongst the most frequent reasons we're given that the government simply must reform (take over, really) our "health care" system are that the premiums are going through the roof and becoming more and more out of reach for 'working people,' and that we have way too many people who are uninsured.

Maine is a guaranteed issue state on health care insurance. That means you can wait until you are sick and need insurance before you purchase it, and you can't be denied. That all sounds very caring and compassionate.

So let's try that fine idea in some other areas. Suppose we were guaranteed issue on auto insurance as well, and you could get away without it until you have an accident. Then, as you ride in the tow truck taking your vehicle to the body shop, you call an insurance agent on your cell phone to purchase insurance, and he can't turn you down, even for "pre-existing" conditions.

Do you think that would increase the number of folks who find it's in their best interests to stay out of the auto insurance market until they are in need of it? What would that do to the number of "uninsured?" And for the rest of us silly gooses who follow the old custom of buying insurance as a matter of course, do you think our premiums would suddenly start escalating at outrageous rates? How could they not, when an increasing number of drivers are not contributing to the insurance "pool," but are simply emptying it?

Suppose that same person could drop his insurance after his car is fixed and paid for by his mandatory issue insurance? How would that work out for the rest of us?

Now let's look at Homeowner's Insurance. Suppose the legislature enforced guaranteed issue on that as well. Then you could save all the money you are now spending on such coverage, and wait until your house burns down, if ever. If and when it does, simply call your local agent and get the guaranteed issue covering "pre-existing conditions" before you contact a builder to get your place repaired or replaced. And then you can drop the coverage again after your builder gets paid.

How do you suppose that would effect the number of "uninsured homes," and what would be the effect on the premiums for those saps who think your home should be covered all the time as a matter of peace of mind? And "fairness?"

Now go back and think about the complaints about health care that I began this discussion with...too many uninsured, and premiums way too high and getting higher.

Then ask yourself who caused the problems leading to these complaints. And more important, ask yourself WHY they did it. Until you can answer that question, you can't fully grasp what's going on now.

And you might think about Pogo while you're at it.

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