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How to Provide Health Insurance for All

Opinion Editorial
December 4, 2008

By Linda Gorman

Providing health insurance for everyone who wants it doesn’t have to come with a high price tag. It doesn’t have to come with increased government control of your medical decisions, or less personal choice when it comes to choosing physicians or deciding on medical treatments, either.

It does require getting incentives right and letting people purchase private insurance from insurers who are allowed to experiment with different types of coverage.

In states with limited regulation of individual health insurance, private insurers have found new ways to offer good deals to responsible people who buy insurance before they become seriously ill. These states offer special plans to people who become uninsurable for reasons beyond their control. In Colorado the plan is called CoverColorado. It insures the uninsurable.

In states with extensive regulation, state governments require that all private companies issue government designed policies to everyone, regardless of health status, who wants one, and can pay for it. Guaranteed issue, as this is called, has been proposed in Colorado.

Guaranteed issue penalizes responsible people. By forcing insurers to issue policies to people who are already sick, state government encourages people to put off buying health insurance until they become ill.

In states with guaranteed issue and community rating, no one buys health insurance until they need it to pay their bills. Health insurance is just a mechanism for paying bills for the sick, sicker, and sickest.

True insurance plans designed to protect responsible people who pay premiums that are invested against the possibility that the money will be needed for a future illness cease to exist.

If you think Colorado health insurance is expensive now, take a look at the cost of joining the sickness pools in states that have passed guaranteed issue.

The following table, compiled by Brian McManus of Medical Savings Insurance Company, compares health insurance prices in states with guaranteed issue to those in states that still have normal individual insurance markets complimented by special arrangements for the uninsurable.

Cost of Health Insurance: Family of four, husband and wife age 35 with two children


Plan Type

Heavy regulation

Augusta, Maine


Anthem, $1000 deductible

Springfield, Massachusetts



Asbury Park, New Jersey


Horizon BC/BS, $1,000 deductible

Chappaqua, New York



Burlington, Vermont



Lighter regulation

Denver, Colorado


Anthem, $1,500 deductible

Sacramento, California


Kaiser, $1,500 deductible

Tallahassee, Florida


United, $1,500 deductible

Columbus, Ohio


Medical Mutual $1,000 deductible

Easton, Pennsylvania


HealthAmerica, $1,250 deductible

Austin, Texas


Blue Cross/Blue Shield, $1,500 deductible

Source: Brian McManus, Medical Savings Insurance and ehealthinsurance.com.

The second tables shows how rates in the individual market for a 35 year old man in Colorado compare with rates for an uninsurable 35 year old man in CoverColorado, Colorado’s subsidized guaranteed issue pool. It also shows guaranteed issue rates for the same man in New Jersey.

As the numbers make clear, guaranteed issue costs far more than targeted subsidies. Because it gets the incentives right, the Cover Colorado plan is less expensive than the New Jersey plan. It also does a better job of making health insurance affordable by charging premiums that vary with household income.

Insurance premiums for a 35 year old Man


Plan Type


Income Above $50,000

Income Less than $50,000

Income Less than $40,000

Cover     Colorado*




$1,500 deductible



$2,000 deductible



$1,500 deductible



$1,500 deductible



$1,500 deductible

New Jersey*


Horizon, $1,000 deductible

*guaranteed issue, community rated policy

1 For New Jersey rates see Department of Insurance Website at http://www.state.nj.us/dobi/division_insurance/ihcseh/ihcratepage_sp.pdf. Rates were as quoted in November, 2008 for C plan with 30 percent coinsurance.