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FirmhandKY -> RE: When they all agree, you know you screwed up (9/13/2009 8:01:03 AM)
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quote:
ORIGINAL: SpinnerofTales
quote:
I was a small business owner in Kentucky when they decided to "fix" the problem with insurance companies. I was next door to Tennessee when they decided to "do" Hillarycare. ORIGINAL: FirmhandKY
1) Do you have any information on what reforms were carried out in KY and it's effects on premiums?
Kentucky's failures weren't widely publicized in the national press (who gives a shit about Kentucky, after all?)
At the time, there were many different insurance carriers and plans. Basically, the legislature mandated many of the requirements that "everyone wants" such as restrictions on the ability of insurance carriers to discriminate based on "pre-existing conditions", and the ability of insurance companies to raise their rates to whatever they wanted. In effect, it was similar to the Public Safety Commissions for other government controlled monopolies, where any rate increased had to be justified.
The result? All except two insurance carries left the state (and one of those only had plans in the two major metro areas of Louisville and the suburbs of Cincinnati). The rest of the state was left with a single carrier: Anthem.
As soon as they had an effective monopoly position, they started "justifying" rate increases. My personal families monthly insurance rate went from about $350 a month, to over $2500 a month within 3 years.
There is a detailed review of the entire debacle here:
The Impact of Government Initiatives on Kentucky's Health Care System
You can use that link to go back to the beginning of the entire study, or you can download the entire book in pdf format here.
Here is a pretty good summary:
June 6, 1997
The Kentucky Health Care Experiment: How "Managed Competition" Clamps Down on Choice and Competition
by Rachel McCubbin
American taxpayers and state legislators now can discern how key components of President Bill Clinton's failed 1993 Health Security Act would have worked by examining the repercussions of a curiously similar program enacted in the state of Kentucky. In April 1994, the Kentucky General Assembly passed a measure that redefined the state's insurance market, created several new state bureaucracies, and altered the financing of health care for the poor. In many respects, the Kentucky Health Care Reform Act of 1994 is a smaller version of the Clinton Administration's discredited Health Security Act. Moreover, the Kentucky plan, like similar health reform plans in Minnesota and the state of Washington, affords a growing body of case studies that state legislators can use to see for themselves how specific regulatory interventions may affect the efficient functioning of the health insurance market and the cost and access of health insurance for individuals and families.
The excessive regulation embodied in the Kentucky plan has sharply increased health insurance rates, has driven health insurance companies out of the state, and has threatened patient privacy. With each passing day, the crisis in Kentucky's health insurance market deepens and the need to fix the government's mistakes becomes more urgent. Thus far, 45 health insurers have left the individual health insurance market. George Nichols III, the state's Insurance Commissioner, recently remarked, "I think going beyond a year would destroy us."2 In the individual health insurance market, Kentucky Kare, the major plan that covers state employees and individuals, has lost $30 million during the past 20 months and continues to lose money at a rate that could exhaust its reserves in 19 more months.3
For state legislators around the country, Kentucky is a case study in how not to reform health care at the state level. For Members of Congress, developments in Kentucky demonstrate once again why the federal government should refrain from imposing ill-considered mandates on the private health insurance market.
I don't expect you to do a detailed analysis, or even read all the detailed analysis. I don't even want to, because I lived through the entire thing. I even testified in front of a joint legislative committee during this time frame, on the "reforms" impact on small businesses. After which Anthem illegally revoked all of my companies insurance policies in retribution.
At the time, I was also on the Board of Directors of a non-profit health care providing organization, so I got exposure from a couple of different directions.
You can say that both of these "reforms" (KY and TN) were "exceptions" or "not done right". However, what they do, if nothing else, is show that any attempt to "reform" the system needs to be done very, very carefully. Which the current attempt certainly is not.
Firm
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