On Face The Nation, John Dickerson spoke to Rand Paul about the problems with the Senate healthcare bill.
“The reason that we talk about a death spiral is there are a lot of sick people out there and it’s not traditionally been the case that insurance companies rush to cover the sickest people first because they’re quite expensive,” Dickerson said.
“So how do you solve that problem? That’s what a lot of these attempts that you don’t like are trying to do.
“I have a solution and I think it would go a long way towards fixing this,” Paul said.
“The individual market is a terrible place to be. If you’re a plumber and your wife gets breast cancer and you’re an insurance pool of two, it’s a terrible place to be. I have great sympathy for people who get sick when it’s just them and their spouse or their family.
“I would let everyone in the individual market join a group plan. How would I do that? I’d let group plans be formed by anybody that wants to form them. Chamber of Commerce, a farm bureau, credit unions, you name it. I’d let anybody form an association. And what would happen is almost everybody would flee the individual market because it’s a terrible place.
But you know what would also happen? They would be- The risk would be taken care of out of the profit of the insurance companies because everybody would be in a group plan. Right now, the insurance companies have gamed the system such that they get enormous profit from the group plans. And then they lose money in the individual markets and they whine and they come to Washington. They write the bill and they get bailed out. It’s a terrible situation.”
He’s not completely wrong. After all, the insurance companies do game the system.
But he’s mostly wrong. While federal regulations have made some inroads into state insurance practices, states still regulate which groups are allowed to form to buy insurance — and those practices still vary from state to state.
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So you’re talking about fighting insurance companies in fifty different states — often in states where those companies are based. Good luck with that!
You’re also talking about underwriting and administering all these smaller groups — groups that won’t save that much money because their risk pools aren’t large enough.
So like other Randian ideas, this one sounds good to the uninformed.