Cost shifting

After reading the article about Insurance Commissioner Al Iuppa’s plans to remove some of the mandates for health insurance, I must say that this would be a profound mistake. Whether they like it or not, insurance companies do not really control how much illness there is, nor how much it costs to take care of our population.

For instance, if the state removes the mandate that requires insurers to offer health insurance policies to small businesses, individuals and people with health problems, the result will be that more people will be uninsured, and thus more people who will require state assistance or charity care by hospitals. The insurance companies will have more leeway to pick and choose whom they want to insure. Obviously they will skim off the healthier, more profitable people as customers, and leave the taxpayers and hospitals to take care of the rest of us. This is called “cost shifting” in the health care sector:If a hospital cares for a certain number of uninsured people (or for that matter, Medicare and Medicaid patients, under which programs hospitals often operate a loss), they are forced to charge better-insured people more to make up for the losses.

By removing mandates on the insurance industry, the state is itself opting to do some cost shifting, at taxpayer expense. We will be handing more profit to the health insurance companies, and helping create a system that discriminates even more than the one we struggle with now, against the self-employed person and the person with chronic illness.

The worst of this is likely to come in the near future, when the economy starts to slow down, and unemployment becomes more common. Companies are relatively prosperous, and offer benefits to workers as a way to entice them to stay with the employer in a difficult job market. If, or when, profits decline and unemployment increases, this need will vanish and we will soon see a drastic increase in uninsured and under-insured workers, and the strain on the system will be exposed.

I hope that the outcome of this entire issue will be more than just another small adjustment. A fundamental change is needed (for instance, a change to a system of universal Medicare, Canada-style) – the day is not too far off when the people of this country will no longer stand for the excesses of our private health insurance system. Mark Kandutsch, M.D. Bar Harbor