Guaranteed Issue and Community Rating

There's a web site I found with an interesting article about guaranteed issue and a mention about community rating. The site is at http://www.ncpa.org/w/w33.html . The site is by the National Center for Policy Analysis. They don't like guaranteed issue or community rating. Who is the National Center for Policy Analysis? I don't know; got to find out. I will be getting more information about guaranteed issue and community rating but I thought I would start with some negative publicity. I like coming back from a deficit. The article below is one of two articles on the site. This one is titled How Washington State Made Health Insurance More Expensive. Go to the site to check out the other article.

"State reforms intended to make affordable health insurance available to everyone have created a crisis in the market for individually purchased health insurance in Washington state, say insurance analysts.

Since 1994, Washington has required insurers who offer individual health policies to sell to any purchaser (called guaranteed issue), and it limits the waiting period for coverage of pre-existing conditions to three months. In addition, since 1995 the state has had "community rating," which restricts insurers from charging different premiums according to risk.

The effect of these reforms has been exactly opposite the announced intention of policy makers:

• Costs are higher, with six insurers sampled by the state Health Care Policy Board reporting an increase in the average cost per enrollee of 29.5 percent between 1993 and 1995.
  
• Premiums are rising faster than the national average; for example, most of the enrollees in Blue Cross of Washington and Alaska are paying 36 percent more than before reform -- with another 11.4 percent rate increase scheduled for 1997.
  
• Fewer people have insurance, with enrollment in the individual insurance market declining 13.4 percent among the five largest insurance carriers in 1996, partly in response to rate increases enacted in late 1995.

Costs are rising and fewer people are covered due to adverse selection -- meaning healthier people are dropping insurance coverage to avoid the increasing expense. For example, in the Pierce County Medical plan, the people who dropped their coverage in 1995 had average claims about 15 percent lower than those who stayed in.

Not only is insurance more expensive, say analysts, but consumers have fewer choices:"

I noticed in the article that people seem to drop out when their insurance cost goes up. That makes sense. I wonder if the initial increase was small and many dropped out which drove the cost up. I'll check this out. At least we all know the meaning of guaranteed issue and community rating.

I'm not moving to Washington anytime soon.