Insurers must sell a policy to anyone regardless of pre-existing conditions under guaranteed issue laws. Guaranteed issue policies are often combined with community rating policies. Under "pure" community rating policies, insurers would be forced to charge the same price to every policyholder, regardless of age, sex, or any other indicator of health risk. The result of guaranteed issue policies tends to be that healthy people are charged more so that sick people can be charged less.
Proponents say that getting more people into the insurance pool, no matter how sick some of them are, spreads financial risk and should therefore lower costs for everyone. Some experts argue, however, that because the sickest 20% of people are responsible for 80% of health care costs, it is impossible to absorb them into the general insurance market.
Featured Podcast
Current State and Prospects for Consumer Directed Health Care Kim D. Slocum, President of KDS Consulting speaks with Malorye Allison, editor-in-chief of ReformPlans.com.
