Consumer Reports cautions about buying your own health insurance; McCain, Guiliani should listen

Consumer Reports magazine, published by the Consumers Union, chronicled in their January 2008 issue (they really are ahead of themselves) the difficulty the self employed and those working for small businesses have in finding health insurance. This is particularly timely since several of the Republican presidential candidates are talking about moving away from employer-sponsored health insurance and pushing people into buying individual health insurance on their own. Individual health insurance is so popular that a whopping 7% of Americans already get their insurance that way. It's great if you are young, in great health, and will never need to use it. But many others might as well have a giant red stamp on their forehead saying "UNINSURABLE." The article details the stories of those who thought they were in good health, but upon applying for health insurance on their own, without an employer-sponsored pool to spread out the risk, were unable to obtain sufficient coverage due to conditions as common as high blood pressure or asthma. Since Consumer Reports doesn't put much of their magazine's content on the web (it's kind of hard to make money putting stuff for free on the web if you don't sell advertising like other news sites do, but that is what gives Consumer Reports such credibility), I cannot link to the article. But it starts out with a great analogy:

Imagine that shopping for a new car worked like this: If you really didn't need the auto and lived two blocks from work, any dealer would sell you a car for a song. If the commute was 50 miles, much too far to walk, no one would sell you a car at any price. You wouldn't get to see a full contract until you plunked down your cash. Your monthly car payment would go up 20 to 30 percent every year, and, by the way, the steering wheel might be extra. The auto industry doesn't work like that, of course, but the market for people who buy their own health insurance does.

The article reveals Consumer Reports' findings:

• 71% of those on individual plans had overall complaints with their coverage, compared to 53% for those on an employer plan.
• 55% of those on an individual plan said their insurance covered most costs, while 81% of those covered by their employer did.
• 52% covered by an individual plan said their premium was too high, compared with 29% on employer plans.
• 45% on individual plans said they postponed needed medical care due to costs, compared to 31% covered by employers.

In Arizona, 24,000 folks are in a state-sponsored, high risk pool called Healthcare Group. These are people who pay significant monthly premiums for their health insurance, are employed, and are not eligible for health insurance through their employer. What they do get through Healthcare Group that they do not get in the private individual market is coverage for their pre-existing conditions. As is always the case with a pool of high risk (sick) people, it costs a lot to insure their health. Healthcare Group has been operating in the red, and the legislature is still determining the future of the plan, and whether the 24,000 Arizonans served by it will continue to have coverage. While the plan is administered through our Medicaid agency, AHCCCS, Healthcare Group was told by the legislature to be financially independent and for several years did not receive taxpayer money. Enrollment in Healthcare Group has now been closed and premiums have been increased, which tends to create a further "death spiral," since no new (and younger) people may join the plan, while those on it will usually get older and sicker. There is not silver bullet, but when someone says everyone should just be responsible for going and buying their own health insurance, it simply is not that easy.