Loophole in industry proposal for universal coverage

Los Angeles Times columnist David Lazarus points out that while, in a letter to influential senators, insurance industry executives promise, in Lazarus’ words, that “they’ll treat all people fairly in return for a government requirement that everyone buy their product,” the companies have left a significant loophole that might allow them to continue charging sicker people more money.

The key words are “benefit design,” the practice by which people can choose different levels of coverage at different prices. In a benefit design scenario, the elderly and infirm will be more likely to choose the more expensive coverage ranges while the young and healthy will choose cheap bare-bones coverage.

“It’s a very potent way of segregating sick people from healthy people,” said Karen Pollitz, a research professor at Georgetown University’s Health Policy Institute. “It’s essentially a way of continuing to charge more based on people’s health.”

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