WASHINGTON — John Oxendine, Georgia’s Insurance Commissioner and candidate for the GOP nomination for governor, agrees with President Obama on at least one thing: health insurance companies need stricter government oversight. Oxendine has proposed a law that would allow Georgia’s insurance commissioner to block excessive health insurance rate hikes on policies sold in the individual market.
In the wake of the controversy surrounding health care giant WellPoint, whose insurance companies plan steep rate hikes on individual policies in several states, Obama has proposed giving the federal government the authority to deny excessive premium increases. About half the states provide mechanisms for ameliorating hikes in health insurance rates, but Georgia is not among them.
Oxendine tried to get a law passed in 2008 that would have given his office more control over premiums, but the Georgia General Assembly, struck by a wave of insurance-industry lobbying, refused to pass it. That’s no great surprise; the state legislature has always given consumers short shrift.
That leaves consumers who depend on the individual market — those who don’t have employer-provided health insurance — especially vulnerable. As more workers are laid off, and as more businesses stop providing health insurance as a benefit, more people will be thrown into the individual market to purchase their own policies.
Last year, Atlanta Journal-Constitution reporters Andy Miller and Margaret Newkirk took a look at individual health insurance policies sold in Georgia. They wrote: “Policies are suddenly canceled. Monthly premiums rival the size of mortgage payments. Huge bills go unpaid because of surprising gaps in coverage.. .With individual plans, carriers can legally charge higher premiums based on age, gender or health. They can refuse to cover conditions that group plans routinely include, or deny coverage outright for people with problems such as arthritis or diabetes.”
Republicans claim that the arbitrary, confusing and consumer-unfriendly policies and practices that we euphemistically call a health care “system” can be transformed by relying on free market principles. At Thursday’s health care summit, they touted the virtues of “free market” fixes. But isn’t that what we have now?
Workers with health insurance provided by a large company have the benefit of administrators who know the system well and know how to work it. (Cox, which owns the AJC, is self-insured; the health care plan is administered by Aetna.) Because a large company buys a lot of health care, it has clout with the companies that sell it. It can negotiate price reductions.
The individual consumer, left to negotiate a complex system on his own, has no such clout: He usually ends up paying through the nose since he can’t argue that he’ll take thousands of other customers with him if he leaves.
And there are other reasons that the health care market doesn’t operate like the market for cars or computers or flat-screen TVs. Sony and Samsung make their profits by selling as many of their products as they can. Health insurance companies make their profits by selling as many of their products as they can and then trying very hard not to actually deliver them.
Try to imagine that you’re awaiting delivery of your brand-new 50-inch TV, for which you’ve already made a hefty down payment. But the company calls to tell you that you violated some obscure clause in your contract, so they’re not going to bring it! In the health insurance world, it’s called “rescission.”
But the biggest difference between buying health insurance and that big TV is this: You can live without the TV. Health insurance literally enhances your prospects for a longer life. You can’t walk away from it as easily.
Once upon a time, political leaders realized that all Americans needed access to electricity, and they stepped in to ensure that all households got that small miracle at reasonable rates — something that the “free market” could not provide. Americans need a similar intervention in health care now.