The Boston Globe is reporting today that some people in Massachusetts are taking advantage of the state's health care regulations to sign up for insurance and then immediately run up huge medical bills. The subtitle of the article is delicious: "Short-term customers boosting health costs – Lesson for US overhaul in gaming of Mass. system." Too late now, Boston Globe!
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.And, in case you missed it, Governor Deval Patrick just refused the insurance companies' request to raise rates even though:
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.
Even as businesses and individuals feel the pinch of surging health costs, three of the four largest state health insurers last week posted financial reports showing operating losses for 2009.So, to recap: your costs are soaring because people are gaming the system without fear of consequence and the government says you can't raise rates even though your business is currently operating in the red.
Once more, with feeling: this is a great plan.