Former GA Insurance Commissioner, Tim Ryles (D) has a few choice words about the possible repeal of the ACA and the resulting rise again of bogus or junk insurance. His comments are printed here with his permission. To learn more about Tim, go to his website at TimRyles.com.
Just saw a news flash indicating that the TrumpCare bill does not have the votes necessary for passage in the senate. Of course, many of us said the bill was an exercise in symbolic politics anyway. As Gomer Pyle might say, "Surprise! Surprise!" Of course it is all Obama's fault for devising a way for hospitals and other health care providers to enjoy increased demand and a way to get paid for providing it, not to mention the benefits passed along to insurance companies. Damn that black guy, he is a thorn in the GOP right wing side that just won't come out without bleeding these obstructionists to death.
Talk will continue, however, and I want to make a few observations.
1. For all of you free marketers, insurance is NOT a free market undertaking. It is heavily regulated by state governments and the feds. As a minor example, with few exceptions, the policies in the millions of shoe boxes around the country can't be sold without government approval; the company and agent who sold the policies are licensed by the state; typically, the rates charged must satisfy the universal standard for rate setting in that they ought not be excessive, inadequate or unfairly discriminatory. For the curious reader, thumb through your state's insurance code for further confirmation of this point.
2. As a highly regulated industry, insurance is distinguished from other commercial activities in important ways. Caveat emptor, the philosophical basis for much of our consumer law, has limited relevance to insurance. (Caveat emptor means Let the buyer beware.) Moreover, insurance adheres to a high standard of utmost good faith. Also, according to the U.S. Supreme Court and statutory law in some states, it is "affected by the public interest." Indeed, federal courts have described insurance as a "quasi public" business. (See my commentaries on line at International Risk Management Institute, a/k/a "IRMI" for further elaboration on these points.)
3. For persons who object to the government mandating the purchase of health insurance, wake up. Having either the government or some other authority to make you buy insurance is a regular experience. For example, every state and the District of Columbia require that vehicles be insured as a condition of usage on our nation's roadways; if you hold a commercial license and engage in interstate commerce trucking, several federal laws, including mandatory insurance, govern your work; try financing a house or a car without proof of insurance to your lender; indeed, fail to get it, and your lender will force place the insurance and make you pay for it.
4. Related to #3, American health care providers constantly face problems with uncompensated care - people who get care but who are unable to pay the bill. Who covers the costs, now totaling an estimated $85 billion? Government pays about 60 percent of the costs and nonprofit hospitals absorb a large portion. Thus, as you can see, allowing people to opt out of the system is simply unfair to the rest of us.
5. Finally, the ACA repeal as currently written would be a big boost to adventurous rogues who would flood the market with bogus insurance. To exercise a point of personal privilege, I share my experiences. Since departing the Insurance Commissioner position in GA, I consulted in and testified in numerous cases involving bogus health insurance plans. Who were the victims of bogus plans? Doctors, lawyers, other professionals, small business persons and just average citizens, well educated and not so well educated. You see, when it comes to insurance, there are few if any "sophisticated purchasers" of insurance.
Cases involving bogus health care plans disappeared from my list of active cases when the ACA was implemented. The examples of cases are available on my web page, listed in my bio.
And that is all I have to say about that. For now, that is.
Let’s hope Tim has alot more to say about this issue, as his perspective is very valuable. Carry on.