Pre-existing condition? Then only buy insurance when you need it.

One of the arguments against dropping pre-existing conditions from insurance coverage is the fear that people will only buy insurance when they actually need to use it.  Not to have insurance as insurance against getting sick.  This practice would drive up insurance rates and costs.  Now that the federal healthcare “reform” bill is now law, the Boston Globe reports that increased costs are indeed the case.

Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.

In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.

The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month. The previous year, the company’s data show it had even more high-spending, short-term members. Over those two years, the figures suggest the price tag ran into the millions.

This is the unintended consequence of removing the pre-existing condition clauses from insurance.  There should be a difference in switching from one insurance provider to another with a pre-existing condion without a gap in coverage, and the gaming of the system as outlined by the Globe.

About Rob "EaBo Clipper" Eno