If Ronald Reagan's Health Coverage Was Cancelled

The story was told to me in the mid-90s with great enthusiasm, by a former executive of a major California-based health insurance company. It seems that a major California health insurer, which had enrolled State of California employees for many years, did a study to find out why writing health insurance for this group was becoming less profitable, and learned that it was experiencing adverse selection: all of the State of California employees who had selected the program were over age 40; the younger employees joined Kaiser which had much lower premiums.

So the insurer did just what insurers still do to employers. It notified California that it was no longer interested in the state's business, and that upon the termination of the contract, it would no longer provide coverage for state employees. The insurer "fired" the State of California.

Though I don't remember the name of the man who told me the story, I remember his grin and the twinkle in his eyes, when he related that among those who lost his coverage was then governor, and soon to be President, Ronald Reagan. The person who told the story said that when the insurer discovered its politically disastrous mistake, it withdrew its health insurance termination decision so that, once again, Ronald Reagan was insured.

I had no independent verification of the story. But it strikes me as quite consistent with health insurers' behavior. So I thought I'd pass it on. Perhaps one of my readers can give us additional details.