Underwriting Is Not The Only Way To Get Rid Of Sick Patients

I was not overjoyed to read that insurers have agreed to abandon underwriting any more than I would be happy to read that terrorists have replaced plans to explode dirty nuclear devices in the subways of our major cities with plans to engage in biologic warfare.

There's more than one way to exclude expensively sick people from an insurer's risk pool: here are several. First, limit the drugs on the plan formulary to make drugs, for people with diseases which are expensive to insure, not covered, very expensive or inaccessible because of bureaucratic requirements. Second, have a network of doctors and health care institutions which doesn't include people or institutions with particular expertise in caring for people with expensive diseases. Exclude providers in certain geographic areas with "undesirable risk exposure." For instance, if a particular occupation (i.e., school teachers and educators) is believed to involve increased insurance coverage risk, don't provide facilities (or solicit business) where teachers and educators are significant population component. Fourth, avoid marketing to "high risk" clientele. And fifth, have an 85% "customer satisfaction" rule: if 85% of your customers are content, ignore complaints from the other 15%: they are not worth the administrative overhead to deal with, they demand too much, and they may be the sick expensive ones.

Finally, a "pool" which is available to individuals who can't get insurance any other way will encourage the strategies described in the last paragraph. It's just another reason to cost shift.