Will catastrophic only health insurance be rescinded in the end?

rdanTaunter explains how the .5% rescission rate figure discussed in the hearings on physical condition cover premiums and coverage is second-hand to dismiss Congressional concerns as unimportant and in fact is a good business practice that will not change. It is worth going to the post to precisely follow the train of thought. Taunter concludes that the chances for rescission for a serious illness is:If the top 5% is the absolute largest inhabitants for whom rescission would make sense, the likelihood of having your policy cancelled known that you have filed a claim is fully 10% (0.5% rescission/5.0% of the population). If you take the LA Times estimate that $300mm was saved by abrogating 20,000 policies in California ($15,000/policy), you are somewhere in the 15% zone, depending on the convexity of the top section of population. If, as I suspect, rescission is targeted toward the truly bankrupting cases â€" the top 1%, the persons with over $35,000 of annual claims who could never be profitable for the transporter â€" then the likelihood of having your policy torn up known a massively expensive condition is pushing 50%. One in two. Rescission definition practice can be found at this time and unfair examples here. Here is why door number two is NOT 50/50.It is suggested that application forms are formed to allow for inaccuracies and that some decisive factor second-hand to cancel policies is easily avoidable at the time of the application, the implication being future use for the inaccuracy makes it worthwhile to allow ambiguity and not examine information, mostly for those who wind up claiming over $35,000 and who have severe, chronic conditions that make premiums from that person irrelevant to profit. This might have not been the intent long long ago, and certainly fraud occurs, but rescission having a foundation purely monetary and not lawful (from a common customer point of view on what fraud is), is the policy today if testimony is to be believed.The first notion, that it is a small problem apart from for the person involved, is discussed in the first post. The key to amended %'s lies in the fact that Medicare takes care of the 65/over group of chronically ill and old clients, so the confidentially covered inhabitants is smaller than the for each centages indicate as well, a main oversight. The second and third part of the problem will be in Part 2 and 3 (clever, huh?)StatsGuy wrote in comments to the Taunter Media post:StatsGuyThe same light corm went off when I read the 0.5%, but I could not have explained it _nearly_ as well. Very nice post.I still wonder, though, whether it might be slightly not as good as than even this picture. 1) I believe your data is for the US inhabitants as a whole. (If I’m wrong, then this comment is meaningless â€" apologies.) But, in fact, much of the sickest part of the inhabitants receives physical condition care via Medicare since big people are (to use your technical term) sicker.So the % of people in the top row AMONG PEOPLE NOT ON MEDICARE is much lower, which means that the conditional likelihood of pain rescission known that you need treatment is much higher. Roughly, if the % of people among under-65 (and not on Medicaid) in the top bracket was not whole of what it is for the whole population, then the likelihood of pain rescission known that you have a large claim is double even your current estimates.2) The likelihood of losing the policy known that you really need it might be X% in any known year. But there’s a cumulative effect â€" over time, you build up a tank of uninsurable who lost cover due to rescission, and now cannot get it back since they have a chronic condition.on July 29, 2009 at 10:03 am | Reply TaunterYou are absolutely correct about #1, and this is a enormous mistake factor. 10% of Medicare costs take place in the last month of life alone, and Medicare is roughly 45% of the national physical condition care spend. So all of those patients are clogging up the top end of national distribution and not on private cover in the first place. Unfortunately, I can’t find a private-only, otherwise individual-pay-only distribution, and of course if I did find an individual-pay-only distribution it would be skewed on the top with deprived of claims (some people have to be spending a lot, but in fact use much less, since their policy was pulled). The Reuters article says Medicare spends 30% of its outlay on the top 5% of its population, which means it has a flatter curve than non-Medicare (I would assume, without evidence, that fewer Medicare beneficiaries have insignificant physical condition expenses). This implies non-Medicare spending is even more highly concentrated with a few very high spenders.On #2, I’m a little less confident, and it was single of the reasons I might have misunderstood James’ original post. There is a cumulative effect, but that effect is blunted to some degree by the fact that the people who account for the very high medical expenditures do not of necessity change much from year-to-year (with the obvious exemption of the end-of-life expenses typically borne by Medicare). In fact, single of the reasons I suspect rescission became such a powerful phenomenon is that if Sally has breast cancer at a young age, she is going to be in the 99th percentile some times; the transporter is weighing years of such expenses against her premium. So it might not be the case that in a forty day career an average person has a 33% chance of ending up at some point in the top percentile (1-(.99^40)); it is probably the case that most people have a tiny chance of ever getting an expensive chronic condition (or at smallest amount an expensive, chronic condition before turning 65), and some people have a large chance of repeatedly being in the top percent.Keep the discussion going. It is clear a profit reason has serious impact for some people...how would you bet even catastropohic only cover premium money?
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