Introduction:
Health care expenses are not evenly allocated across the population. About 20% of the U.S population dealing with serious or chronic diseases spends about 80% of the health care dollar. The low incomes, the elderly and the disabled are the high percentage of people using the most health care resources and cannot afford to pay for their health care services. There are serious public health risks with a large uninsured population and not compensating care leads to higher costs when patients avoid care until they are seriously ill. Though “community rating” has become one controversial feature of the health reform bill winding its way through Congress as well as through the economist it should be maintained. Another controversy …show more content…
According to Institute of Medicine (US) Committee on Employment-Based Health Benefits in 1993 Employment and Health Benefits: A Connection at Risk, biased risk preference is ever possible when employers, individuals, and other organizations can choose whether to buy health coverage and/or whether to select one health program instead of another which would lead to risk selection and experience rating.4 Risk selection can affect access to health care. Though risk selection may have benefits, it also has adverse effects. Any time there is biased risk selection or experience rating, it leads to paying high premiums, leaving people at high risk (the aged and the sick) to be uncared for, worsen health conditions, unhealthy population, limited health care services, death spiral, medical bankruptcy and much more. Therefore, it would be good to eliminate biased risk preference, risk selection, experience rating and concentrate on community rating since that leads to a healthy population, reduces the mortality rate and reduces future …show more content…
Here the insurer predicts a group’s future medical cost based on the loss experience of groups whose members have characteristics common to those of the individual or the individual preexisting conditions. From the beginning community rating exists; rates differed for single and married persons and group and non-group contributors. Blue Cross chooses community rating because the voluntary hospitals that organized the Blue plan felt that it was best suited to gain community support for their projects and their tax-exempt status allowed in most places in both hospitals and their programs. But competitive pressures from experience rating private insurance firms have caused many Blue plans to abandon or modify their community rating