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Mass. Residents Gaming Health Insurance System (Surprise!)

Coming as a surprise to exactly no one that actually thought about the Massachusetts health reform effort when it was being debated:

The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.

Read the rest of the article on Boston.com.

The report itself is available on the Mass. Division of Insurance website. Among the major findings:

  • After adjusting for higher premiums paid by individual subscribers (e.g. through
    group size adjustment and age factors), the cost of the merger is estimated to be 2.6% (ranging from -4.3% to 5.9% per carrier) or 1.1% to 1.6% higher than the 1.0% to 1.5% impact that had been projected prior to the merger.

  • In 2006, individuals and small groups who terminated within a year had loss ratios 2.2% lower than average for the combined markets. However, in the Merged Market, the loss ratio of those terminating within a year is 8.8% higher than average. This indicates adverse selection may be occurring.

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This page contains a single entry from the blog posted on July 1, 2010 3:30 PM.

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