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Session Two - What Doesnt Work?
Paul Ginsburg: Well be taking a pause to switch panels, and some of those people who had to squeeze in near the doors, this might be a good time for you to move. There are a lot of really good open seats, particularly in the middle section.
Paul Ginsburg: Were about to start the second panel. Please return to your seats, and Im going to introduce the panel. The title of this panel is "What Doesnt Work?"
Basically, of the many papers that were written in health affairs that were not so much reactions, but inspired by the Pauly-Nichols broad paper, weve sorted the papers that will be presented this conference into the what doesnt work versus what does work in a sense thats lets say the half-empty papers versus the half-full, or perhaps very empty versus very full. And the first of these panels will discuss some of the challenges associated with the individual market and some of the ideas to improve it.
Karen Pollitz is the project director at the Institute for Health Care Research and Policy at Georgetown University. Kathy Swartz is a professor of health policy and economics at the Harvard School of Public Health. Mark Hall is the Fred D. and Elizabeth L. Turnage Professor of Law and Public Health at Wake Forest University Medical School. And Deborah Chollet is a senior fellow at Mathematica Policy Research.
After their presentations well hear from--thought theyre not here, hopefully theyll be here--from two distinguished representatives from Capitol Hill, David Nexon, whos Health Staff Director of the Senate Committee on Health, Education, Labor and Pensions, and Patrick Morrisey, whos Counsel to the House Committee on Energy and Commerce.
Karen Pollitz: Thank you, Paul.
Good morning everybody. I have no slides.
I want to thank the Center in Health Affairs for sponsoring this forum today, which I think is a terrific idea, and I want to say a special thank you to Richard Sorian, who was co-author with me for the essay of mine that appears in Health Affairs, and also with a study that he and I and some others did last year on medical underwriting in the individual market, which I think shed a little light on some of the tough choices and stoicism that that market can require.
It is well documented that the individual insurance market is small, voluntary, unsubsidized, volatile and vulnerable to adverse selection, and it is therefore understandable that carriers in this market defend against adverse selection by restrictive underwriting practices.
From a business point of view I would say that the individual market probably behaves pretty much the way one would expect it to, and so government regulation, to make it behave differently from that perspective, would not be desired. Richards and my essay in the Web exclusive examines the individual health insurance market from another perspective, that of people seeking health insurance coverage and health security. Sometimes this viewpoint is characterized as reflecting societal goals as opposed to goals of economic efficiency. I think thats a perfectly nice characterization, and a perfectly appropriate one.
People, including the very smart policy ones in this room, but also young waitresses, retired salesmen, soccer moms, recent widows, buy health insurance for protection. We buy it so that if we get sick of hurt we can obtain the health care that we need to get better, and so that we can be confident that our access to that important health care wont be blocked because of inability to pay. For health insurance to provide this protection it has to meet four tests.
It must be accessible; you have to be able to get it. It must be affordable; you have to be able to pay for it. It must be adequate; it has to cover the care that you want it to get you to. And it has to meet all of those things all of the time, not just at a point in time.
Held to this four-part standard, I would submit that the individual market, as structured today, does not work well at all. And Id like to just want you through those four standards quickly.
First of all, access. Our study of medical underwriting practices showed that access is not something that the individual market can guarantee everyone. In medically underwritten markets you are virtually 100 percent likely to be turned down if you have HIV, also arthritis, brain injury, cancer, diabetes, epilepsy, heart disease, hepatitis, lupus, multiple sclerosis, organ transplant, osteoporosis, or if youre pregnant. Ill stop at the Ps and not do the rest of the alphabet.
You may also encounter problems if you have access problems, if your health conditions are more mild. For example, if you have hay fever or depression, or if you are overweight. And you may encounter problems if you are healthy today but you have a history of health problems. Nobody disputes that denials on these bases occur. We certainly can ponder the incidents and we should study them more, and in fact, I think it would be terrific if more communities in the industry would do what one did for Len and Mark, and turn over their underwriting data so that we could really see how often this happens. But we do know that access problems exist.
Two, adequacy. It has also been well documented that individual health insurance covers far less than group health plans. Cost sharing is much higher, and coverage for what I call the three Ms, maternity, mental health and medications written with a prescription, is quite limited if not downright rare. In addition, as we found in our study, exclusion riders are widely used in the individual health insurance market. In fact, they seem to be the underwriters tool of choice. The applicants in our study were far more likely to pick up an exclusion rider than they were to be turned down. Some of those riders were relatively narrow and innocuous. One of our applicants with hay fever picked up a lot of riders excluding coverage for hay fever. Big deal. But others were more sweeping, excluding coverage for cancer, asthma, depression, or entire body parts, knees and ears, or even body systems, the respiratory system or the circulatory system.
I just met a guy last month who recently sought medical advice for some nonspecific pain in his right side, and shortly after that he applied for individual health insurance and was offered a policy that does not cover his right side.
Karen Pollitz: Clearly at some level the term "adequacy of coverage" is subjective, and we could argue for a long time about what that means. However, I dont think that should frighten us off from struggling with this concept and trying to set some standards. In fact, I think we ignore this issue at our peril. Its important to keep in mind the very excellent research of Elizabeth Warren, who is a Harvard Law School Professor and an expert in bankruptcy law. She has found that one half of Americans who file for personal bankruptcy do so at least in part because they cannot cope with medical bills, and 80 percent of those filers were insured. So being underinsured because your policy has very high cost sharing or doesnt cover the drug you need or excludes your circulatory system, is more than just a drag.
Third, affordability. It has also been noted that the cost of individual health insurance is very highly variable. In our study we observed a scatter shot distribution of prices for relatively similar policies. Prices vary based on where the policy is sold, your age, your gender, and also on your health status. Rate-ups based on health status are also common in the individual insurance market. Theyre not as common as exclusion riders in the study that we did. And Mark and Len, in their study, found that rate-ups also occur relatively frequently, and they found, as we did, that rate-ups tend to be in the neighborhood of 25 to 50 percent. But before we feel good that only a 25 percent rate-up is not so bad, I think we need to ask the question, "25 percent of what?"
When a rate-up is applied to health insurance that is already expensive because you live in Miami or Chicago, or because you need family coverage, or because youre over the age of 40, the amount of additional premium can be impressive. In our study, in almost half of the rated-up offers, the add-on to the premium alone--so not the base premium, just the add-on--exceeded the tax credit that the Bush Administration has proposed, which is $1,000 for an individual, $3,000 for a family.
Finally, the fourth standard, always. If you are lucky enough to buy coverage that you can afford and that you find adequate, the individual market does not guarantee that this will always be the case in the future. Age rating adds enormously to the cost of coverage over time, and is a widely-used practice in the individual market. Re-underwriting, something that the Wall Street Journal discovered this spring, occurs far less frequently, but the practice does occur, and it is by no means universally illegal. Even more of a threat, as Mark Hall has discussed in his excellent essay, individual policy holders who develop health problems down the road, can get stranded if the carrier closes a policy and doesnt let new people buy it, making the premium of that policy spiral upward, or they can get left uncovered and uninsurable if their carrier leaves the market, another phenomena that has occurred not so infrequently in a number of states recently.
So the sweet deals that the individual market wants very much to offer to the youngest and healthiest applicants, by no means can be expected to persist over time.
Can this marked be fixed? I am sure that the assembled expertise in this room could make a valiant try. I am especially looking forward to Kathys remarks on reinsurance endeavors on high-risk pools to see what it is that we could do in the absence of subsidies to make this market work better.
Will subsidies alone without additional rules or fixes cure the problem? Absolutely not. Even with the introduction of subsidies, carriers in this competitive market would be crazy to unilaterally disarm and allow the competition to steer higher risks their way.
Can we add rules to the level playing field and subsidies at the same time? Well, were about to find out perhaps. Congress just enacted a little case study that we should all be keeping an eye on this August of the New Trade Act, establish tax credits, and uncapped, 65 percent of premiums can be claimed for a credit for certain workers and early retirees who lose coverage. The law is not completely clearly drafted. Its not completely clear where it is that you can buy this coverage, but it appears that states can opt for the individual market as one venue for the subsidized coverage so long as it is guaranteed issue and imposes no pre-ex.
I think it will be very interesting to see how this credit works, and in particular some of the implementation issues that accompany it already. What were hearing from the states is that the implementation of a tax credit may not be quite as smooth and simple as just throwing some money on the table. So with that, Ill stop.
Paul Ginsburg: Thank you, Karen.
Katherine Swartz: I was trying to figure out why my paper was in the "What Doesnt Work" section of the conference, because Im advocating a mechanism that would make individual health insurance markets more efficient and more accessible to general population, but I was just told that the laptop crashed and so my slides are not going to come up, so thats why this is on the doesnt-work section.
Katherine Swartz: So if you follow along, the slides are actually in the handouts that are right I think in front of or behind my paper thats in here.
So that said, I want to sort of do two things with this talk this morning. One is to begin by describing how individual insurance markets work and why the individual markets are not efficient and not fully accessible to many potential enrollees, and the second is to talk about this proposal that the government should act as reinsurer in these markets.
If you switch to the third one, the competition in nongroup markets. Economic theory holds that perfectly competitive markets result in economic efficiency, that is the products are produced at minimum cost. But there are some market conditions that prevent markets from operating efficiently, what is often called market failure, and asymmetric information in a market is one such condition, and it is the culprit in the individual health insurance markets.
Asymmetric information exists in these individual markets because the carriers cannot possibly know as much as the individuals do about their own health conditions or their family history of health conditions or the proclivities for seeking medical care, what Len Nichols and Mark Pauly refer to as whether theyre stoic or not. In large groups this asymmetry is not a problem because almost everyone in the group enrolls in health insurance, so the prevalence of very high cost people is very small. But in individual markets, carriers fear adverse selection, and of course this fear is caused by fear of mis-estimating for any given year the medical costs of the people who actually enroll in a particular policy, such that the premium revenues are less than the actual cost that the carrier has to pay out for their medical care. And this is what would lead to a death spiral for that particular policy and perhaps even the financial ruin of the carrier.
This fear of adverse selection has created a different form of competition in these individual markets than the general price competition that we think of when we talk about competitive markets, generally when we take Econ 101. The competition among carriers selling policies in the individual markets is the form of how best to avoid people who are likely to have very medical care costs, people who we often refer to as high risk.
So how do the carriers do this? How do they compete? One way is they just segment the market. You find that many carriers only operate in a few states. They will only sell insurance to self-employed people like going through the Chambers of Commerce, or ex-military personnel, that kind of thing.
If you turn to the next slide, their primary way of doing this however is through selection mechanisms and I want to just focus mostly on the last one, the many policies with different covered benefits. This is particularly creative in terms of a way of being competitive. You can differentiate your own policies from competitors, and try to separate out high users of medical care from low-risk types. As Karen said, you could generously cover particular types of services that would be attractive to low-risk enrollees, and you could limit coverage of other types of services thought to attract high-risk people. You could also play with the differences in the cost-sharing mechanisms to try to attract low-risk people versus high-risk people.
Now, the assumption behind this form of competition is that people are either low risk or high risk, and if a person becomes a high-risk person he or she will remain one. And I think that in some ways economists have played into this, differentiating sort of high risk versus low risk because of the risk adjustment models that we spent so much time on over the last 15 years, where in these simple models, to try and explain risk adjustment, we talk about people as either high risk or low risk, and we act as if theyll remain high risk. But there is no evidence of someone who is in that very high end of the expenditure distribution, that top 5 percent, remaining in that group in the following year and subsequent years thereafter. I might make an exception for very, very premature babies who might be born at the end of one year and then following into the next year, but in general there is really not evidence that we have of that. Its really impossible to predict who will be a very, very high-cost person, because much of what determines whos in that far right part of the tail of the distribution depends on random events that we simply cant predict. And yet its the fear of the cost of the people who are in that far right side of the tail that drives the carriers risks--or carriers use of these selection mechanisms.
So if you now turn to the "Whats Needed." If carriers risks of very high costs could be reduced, the carriers would have far less incentive to use the screening mechanisms, and moreover, if the burden of the cost of these very high-cost people were shifted to the broader population base and not just the enrollees of policies sold by a particular carrier, we would have a situation which would be far more equitable in terms of the general population, and not just a real burden to the people who enroll in those policies, who might turn around and decide to drop their coverage because their own premiums went up.
If the government were the reinsurer, we would end up solving this problem. As the reinsurer the government could assume responsibility for most of the cost of people who are in say the top 3 or 2 percent of the expenditure distribution, and I should say right now that we would need some pretty sophisticated models to sort of figure out whether we wanted to break that at 2 percent, 3 percent, 4 percent, the top expenditure part of this.
And just as with reinsurance thats sold in the private market, there could be different layers of carrier liability that is their own cost sharing and responsibility for the cost of their enrollees, because you want to keep some incentive on those carriers to try and manage the health care costs and not just dump them over to the government.
So you could start, for example--and I have this example in the paper--you could start reinsurance, say, at $30,000 worth of claims. Anybody that had more than that, then the carrier could turn this over to the government, and the first layer might go from $30,000 to $75,000, and the government would take over 90 percent of the costs of that layer, and then you could vary the responsibility thereafter. In the example I have in the paper, the carrier would end up paying $49,500 worth of the cost of somebody who had $200,000 of costs or more. So you can see that the carrier is still at risk for a sizable amount of money.
But the cost of people who are in the bottom 95, 96 percent of the distribution of expenditures, that risk, carriers can, I think, reasonably be expected to assume that risk, that responsibility for their costs. The result of this is that the insurance markets can operate more efficiently. We would have far less emphasis on these selection mechanisms and money spent to develop them, because the carriers dont have as much incentive any more to try and stay away from very high-cost people, and the burden of the cost would be spread far more equitably across the population, and it would keep low-cost, low-risk people in this market. They would not have an incentive to want to drop their coverage just because a bunch of high-risk people came into their particular kind of policy.
So if you turn to what I think is the seventh slide. There is a lot of precedence for the government acting as reinsurer. The catastrophe reinsurance market that this country has exists because there is a history of the government stepping in to pay large fractions of the cost of catastrophes that weve had. FEMA exists, and its an acknowledgement of the governments role in these markets and responsibility for taking care of very, very high costs and catastrophes. And if you really think back to a year ago, the airlines similarly asked for a government back stopping of their potential costs in reinsurance for catastrophes, airlines being used to go into the World Trade Center or the Pentagon.
The secondary mortgage market exists because the Federal Government assumes responsibility for the worst risk mortgages. It is unlikely that either one of these markets would exist without the government having this role of back-stopping and covering the worst risks in either of those markets. Note that the tax credit proposals dont take into account how fear of adverse selection really drives the competition in the individual markets. And I think that the subsidies are likely to exacerbate this problem of adverse selection unless the subsidies are very large and large enough to bring in young, healthy people who essentially then we would get back up to a situation that looks much more like large groups, where theres a very low prevalence of very high-cost people in the entire set of people covered by individual insurance in any one carrier. So we need extremely high subsidies to do this.
And I think that if we want to go with these tax credit proposals we need to couple them with a proposal to have the government to act as this reinsurer in these markets and take care of the very, very high cost that is in the very top part of the tail of the expenditure distribution.
So in sum I want to say that I think that the nongroup markets have potential for reducing the number of uninsured, and I certainly talked about that in the past, but I think that these proposals need to address the fear of adverse selection which quite rationally drives the form of competition by carriers in these markets, and that if we had a proposal on the table before Congress that the government should act as reinsurer, I think that would increase the efficiency in these markets and wed spend much less money on trying to screen out very high-cost people, and it would certainly promote equity in terms of spreading these costs across the entire population, which is where I think that burden belongs.
Paul Ginsburg: Mark.
Mark Hall: Well, I have neither nor a prepared talk. I didnt have the main paper when I wrote my paper, and then when I composed my thoughts I didnt know what the other presenters were going to say, plus I didnt have a computer.
Mark Hall: So Ive been jotting things in the margin. Heres my talk, scribbled all over the place. So Im going to make just I think a few points which I think underscore some of the comments made before and then respond to some of the points that have come up and maybe a couple points that havent been made yet.
I think Rob Cunningham hit the nail right on the head when he said it all depends on how you frame the issue, and in my mind, you know, whether Im on this panel or the other panel depends on whether Im asked to think about the individual market as an alternative to the employer group market or whether Im asked to think about the individual market as a market that functions well enough to give vouchers to uninsured people. In other words, is it better than nothing? Certainly. Is it better or equivalent to the group market? I think thats where the real problems lie. Most of the discussion is framed in terms of whether its better than nothing and thats hard to disagree with.
But to make the issues more interesting and challenging, I thought about them more in terms of is it equivalent or a reasonable substitute for the employer group market? And thats mainly the question that frames my paper, which Im not going to deliver because I decided to comment on some other points. But just to summarize sort of the bottom line of the paper, its really to make the individual market work sort of reasonably equivalent to the group market in terms of the ability, the accessibility, affordability kinds of issues that Karen and others have raised.
You would essentially have to create a special set of market rules that create a new form of market thats spliced in between the current existing individual market and the current existing group market. And I dont need to tell anybody here, but remind you that we already have a very complex market structure due to ERISA and the tax deduction and the economies of buying as groups versus individuals. We essentially have three separate market segments already with all sorts of sort of hybrid border-crossing mechanism like association purchase pools that we dont know where to classify, as was noted earlier.
And to create yet another one can be done, and certainly we have the minds in this room to do it, but its a complex process with an uncertain outcome, and thats essentially the point that my paper makes.
But to hit a couple points that have been raised in the discussion so far, Ive been thinking about this issue of adverse selection that Kathy was talking about, and the idea that if you create a high-risk pool or research mechanism, youll take out the top tail of the distribution and alleviate the fear of adverse selection. But I think that only goes so far for the reason that adverse selection operates throughout the range of the distribution. I mean the point is that even if you take the highest risks out of the market, carriers are still going to compete to a large extent on their ability to sort and classify those risks accurately, which requires intensive underwriting. Regardless of whos in the market, youve still got, through detailed underwriting, to know whether this is a risk level 1, risk level 2, risk level 3 person, and that adds administrative costs that dont exist in the group market.
You also have the question of not only whether to buy but what kind of coverage to buy. And I think that one reason that the prices are as attractive as they are in the individual market is the fact that the products dont cover as much, and my sense is that they typically dont cover maternity costs, that its difficult if not impossible, or at least not economical to purchase substantial mental health coverage. So the kinds of coverages that have big, important public health considerations that are easily taken care of in the group sector are fragile or lacking in the individual market because of the much more intensified tendency to buy the particular kind of coverage that meets the individuals needs, and therefore to price out of the market the kinds of coverages that people buy only if they know theyd use it.
Let me move on to another topic which has to do with the fascinating, the issue of guaranteed renewability and the point that John Bertko raised about when you buy individual insurance youre paying for this years coverage as well as the reserve that gives you the right to continue your coverage into the future.
This is a topic that is near and dear to the heart of Tom Miller from the Cato Institute, and theres another conference next month on that, that I would have liked to speak at, but I couldnt make it, so Im going to deliver my remarks now.
Mark Hall: And Ill send you my reimbursement.
Mark Hall: And in response to some fascinating ideas in a paper last month on another Web exclusive with Health Affairs, that Pauly and Patel--is that right, Mark? On guaranteed renewability. The idea is that if we can get people to buy insurance when theyre young and healthy, and they can keep it for the rest of their life. The fact that it goes up in graduated increments as they get older isnt that big of a problem because their income goes up and what-have-you, and thats an attractive--and then if you take care of those with congenital problems or chronic illnesses through other mechanisms, you would have a potentially well functioning market.
Well, my point is that guaranteed renewability doesnt really accomplish that for the following reasons. First of all, renewability does not equate with portability. So the fact that you can renew with that carrier doesnt mean that you can switch to a different carrier, which, number one, affects the price competitiveness of the market. But number two means youre stuck with, youre stranded if that carrier pulls out of the market. You have no protection at all, because you dont have the portability concept that were familiar with through HIPAA. Now, thats not just sort of an unfortunate point. It really affects the competitiveness of the market in terms of a barrier the entry.
Ive been doing field interviews with insurance agents in North Carolina for another project about the individual market, and Im consistently hearing the following point, that theyre simply refusing to sell insurance with carriers other than Blue Cross because theres been a lot of carriers that have pulled out of the market over the last 5 years. And they say, "I cant sleep at night selling a policy that might be cheaper at the moment or whatever, knowing that 5 years or 3 years from now my client might be at my doorstep saying, "What did you do to me? Why did you sell me this? Ive got nothing now. Ive got this condition. I cant get insurance anywhere else.""
And that sort of unwillingness to trust the new market entrance of those who dont have proven staying power in the market, I think really, considering that people do use agents for advice in this market thats very confusing and frightening is a real concern.
The second problem with guaranteed renewability is it only points to that particular product, so even if you have a carrier that stays in the market, if it decides to stop selling that particular product, instead sell a somewhat different product, youre stranded in that particular risk pool. It doesnt give you the right to transfer to the other risk pool. And that can be manipulated by unscrupulous carriers, and the market might work well enough to sort of weed out over time those unscrupulous practices, but even just the normal sort of upright long-term committed carriers to the market over time change over their products, end up stranding people in these high-risk pools. And if they dont sort of give them the right to move, then theyre stuck with a pool, that due to the concept of adverse retention, only the sick people keep their product, those that are healthy are able to switch to the new products, gives no protection against changes in your risk status over time.
And Ive seen this phenomenon in the particular state Ive studies, which is North Carolina. Even with the largest carrier, its introduced, over the course of about 10 years, had 3 different platforms for its individual insurance coverage which means that its over the course of 10 years closed out two other risk pools, and these have--premium spirals have shot our of sight. So thats sort of a hidden problem that I think isnt sufficiently recognized in these discussions of guaranteed renewability. So having made those couple points, I think I will stop early.
Deborah Chollet: Good morning. Ive been asked to take a look at what is a presumed fix to this problem of underwriting in the individual market, to the problem of very high rates, kind of out-of-control rates for high risks in the individual market, and those are high-risk pools.
Largely because insurers strongly prefer the idea of high risk pools to regulation of the entire market, 30 states now have high risk pools. In fact last year New Hampshire dismantled their guaranteed issue in the individual market even though they were fully subsidizing individual insurers losses in that market in favor of a high risk pool under the argument that it would bring more competition to the state and minimize increases if not actually reduce the cost of individual insurance in the state. And parenthetically, about 2 days after the Governor signed the high risk pool legislation, one of their large carriers then left.
Deborah Chollet: So its not clear from the face of it, from the obvious evidence, why insurers prefer high risk pools except that they are able to argue that the high risk pools should do what regulation would otherwise do, and therefore regulation does not occur.
High risk pools I think--and youll see from my piece in the Health Affairs, that I think theyre a great idea. I think in principle they do exactly what should be done. In principle theyre the alternative to what Kathy proposes. They accept high right kind of guaranteed issue basis. They subsidize it. They spread the risk broadly among all insurers in the market. Well come back to that all insurers issue. And on that basis they should make insurance much less expensive simply because they take off that high end tail presumably, and insurers are able themselves to define what the high end tail is and sent them into the high risk pool.
So on the face of it they should work just fine, and therefore, on the face of it the Trade Assistance Act refers to high right pools and offers a subsidy to high risk pools as a kind of fix to this market. However, they dont operate the way they might in principle and their failures are stunning. They are very small because their premiums still are very high. They occasionally close in some states. California is the most obvious example of a pool thats on-again, off-again, simply because their funding stream is so unreliable that they cap enrollment and close the pool periodically to new enrollment. They currently have a very, very long waiting line to get into that pool. Florida simply closed theirs permanently. They decided that it wasnt worth funding, and if you do not have the ability to buy individual insurance in Florida you are simply SOL. Theres no place to go.
The high risk pools are typically funded, as I said, on assessment on all major medical premiums in the state, and that includes group premiums as well as individual premiums. All of you know, I believe, that the size of the group market literally swamps the size of the nongroup market, so that means that group carriers pay 95 percent of the subsidies that go to high risk pools in every state. This sets up an enormous tension, and you might expect, and the group carriers see the high risk pool as not salient to their line of business. Theyre paying most of the freight. By paying most of the freight, they feel theyre made less competitive with the self-insured market, and the battles begin. The small of the individual carriers who are paying about 5 percent of the freight on the high risk pool, simply kind of slip to the side and go on with life.
But when it comes to stating their reluctance to pay increased subsidies to the high risk pool, they of course are right up there in front with the group carriers, saying no, this is just too expensive. We have to reduce the cost.
Well, with this tension you can imagine what happens to high risk pools and it has happened. They occasionally close, as I mentioned. Their premiums are relatively high, as Karen mentioned. It may be 25 percent higher than the standard market, but 25 percent higher than a very high price, and 25 percent higher than a high age-rated price in virtually every state.
Enrollment, they have curtailed their benefits. Almost all of them have waiting periods for coverage of pre-existing conditions, which seems to most people who havent looked at these pools, to be the ultimate irony. The pre-existing condition that got you excluded from the individual market is not covered in some high risk pools for as long as a year in the high risk pool. So you can get into coverage but you cant get into coverage for what you need in this high risk pools.
There is portability in some of these high risk pools. That is, if you come from an insured arrangement of any kind, individual or group, you have immediate coverage of pre-ex and high risk pool, but that portability in most lapses in 30 to 63 days, and some pools have no portability at all.
They have limits on benefits, that while to cost sharing looks very much like the cost sharing in a conventional individual health insurance plans, 2 states have no maximum on out-of-pocket expenditures for any benefit covered by the high risk pool plan. 8 states have lifetime limits of less than a million, which may or may not be an issues. And a million is a lot of dollars, and most people dont hit that, but some do. 3 states have annual limits of less than $200,000, which is a very low annual limit in any plan, much less a plan thats taking a high risk entrant. Most strictly limit coverage for mental health, very, very low and narrow coverage for mental health, and 2 states dont cover mental health at all in the high risk pool. 10 dont cover maternity. And some cover maternity only as a rider.
So the issues in high risk pools are high. These "fixes", quote, unquote, have a lot of patches and bandaids on them, and theres a lot of leakage in this fix, and it is not, I think, what most people believe high risk pools are, and it is certainly not what high risk pools can be.
What can high risk pools be? Well, they can be a lot if they are adequately funded, and I point out in my paper and elsewhere that Minnesotas high risk pool is at the moment at least a model high risk pool. If I compare it to the individual market its covering about 6 percent of lives in the entire individual market. The nearest runner up to that is 2 percent of the individual market in Oregon and Nebraska, and everybody else is running well less than 1 percent of the folks who actually make it into the individual market, and the percentage of people who are not in either public coverage or in group coverage is an infinitesimal percentage in all states except those three, Oregon, Nebraska and Minnesota, and Minnesota is so far ahead of the pack, you have to eliminate it from being any kind of statistical analysis because it simply drags everyone after it statistically.
So I guess my bottom line here is that insurers cant have it both ways. You cant have the run of a market that has such high social value as health insurance and expect neither to be regulated, nor to participate in fulfilling the social value that you are set up to do. If were going to have high risk pools we should have real high risk pools and we should look at them with our blinders off, and consider what they cost and how to fund that, probably funding as a assessment on premiums is not the right way to go. It might be, but it is probably not the right way to go for all the reasons we have talked about this morning. It probably needs broader funding, and that is an issue, as you know, in all states that are currently struggling with revenue issues, and are dealing with solutions to economic recession that typically tax cuts.
So the issue of how to fund high risk I think is an open one. I think we have vehicles available to us, but we dont have vehicles that are functioning anywhere near as well as they need to function to make a difference in this market.
Let me say one final thing in response to some of the comments made by earlier speakers, and especially on the first panel. While I fund in other research that large high risk pools can make a difference, that in states with very large high risk pools, again excluding Minnesota, because of course that makes the difference, in fact coverage among adults who have neither group coverage or individual coverage really is higher. I dont see any evidence, however, that coverage among sicker adults is higher, and that probably relates to the inaccessibility of high risk pools in most states, and also the availability in some states of greater group coverage.
The second comment related to this idea of greater group coverage is that when you hear that the individual market is growing, I dont think you need to infer from that that all is well in the individual market in states in which it is growing. Were dealing with a kind of a closed pool here. Group coverage has been declining in the last couple of years, and therefore of course individual coverage is growing. The problem is that individual coverage never grows to pick up the total lives that the group market sheds. Even though just because the denominators are so different, the individual market is so small, and the group market is so large, that a very small decline of the group market will drive a high percentage growth in the individual market, there still is a lot of leakage down the middle into the uninsured.
The second is that I have found no evidence, in looking at the impact of high risk pools on coverage in the individual market that cry that as an issue. Where I find that small risk pools dont do anything, I also find that more generous public insurance plans dont do anything either. They simply dont drive less coverage, i.e., the crowd-out scenario, they dont drive less coverage in the individual market.
And finally, Im concerned about the no-mans-land, the no-mans-land that exists because of our concern about crowd-out, the no-mans-land that exists because insurers in fact have a tacit noncompete relationship when theres a high risk pool. Theyre very aware of the prices that are charged in the high risk pool, theyre very aware of the benefits that are available in the high risk pool and they price around those things. The upshot is that we have, in order to achieve this overall social value of insurance, we have all of these separate markets, and the private piece of that market is only really comfortable when theres a non-mans-land between themselves and whatever the fix is. That is never going to generate that issue of being comfortable only when theres a buffer, is never going to drive a fix or generate a fix on the problem of the uninsured in this market. We simply have to be comfortable with these relationships, and we have to work at seamlessness as opposed to the private insurers concern that the fix will compete with their own financial business.
Paul Ginsburg: Well hear now from two congressional staff. Unlike the papers which were sorted as to how they felt about the individual markets, the congressional staff were not sorted, and in fact we made sure to have a mix on each panel of a Republican and Democrat. Lets hear from David Nexon first.
David Nexon: Thank you, Paul, and thanks to the center for putting on this excellent forum.
You know, theres an old saying that you can put lipstick on a pig, but its still a pig, and I think perhaps because of the sorting Paul referred to, everyone on this panel, except Patrick down at the right end of the podium, will probably agree that the individual market is a pig, but the next panel I think is going to come up with some new and better ways to put lipstick on it.
I think, picking up from the initial paper in this whole section, the one by Pauly and--Mark Pauly and Len Nichols, which I think was a rather more favorable look at the individual market than many would subscribe to, the facts that they say are undisputed, to me leaves me to the conclusion that the individual market is not a very effective way of dealing with the problem of uninsurance that we have today. The undisputed facts that they mention to me in fact are quite devastating. The first one is that the administrative costs in this market are estimated to be 30 to 40 percent of premium. When you think about that, thats a staggering figure. That means that only slightly more than half of all the premiums that are paid in this market actually go to provide for medical care, and if we sort of follow down the chain and shift out the other administrative costs in the system that have nothing to do with the buying and selling, that dont relate to the direct buying and selling of insurance, were in a situation where were paying, getting essentially pennies on the dollar of value for the premiums paid in the individual market.
Second, its also undisputed that many people--you can argue as to whether its 20 percent as Pauly and Nichols say, or whether its 40 or 50 percent, as some of the research that Karen has done would indicate--are excluded from this market entirely, or forced to pay exorbitant costs, or covered in a way that writes out the conditions they are mostly likely to get sick from, because they have some health problems or because they are older and therefore in a higher cost category.
So with all those comments, it doesnt seem to me that the individual market is currently constituted as a very effective mechanism for dealing with the problems of the uninsured or really for providing insurance to anybody. Nor does it appear to be--and in my mind that leads to the conclusion its not a terribly effective vehicle for future reforms, which is not to say we shouldnt make efforts to improve it as we have done in the past, but its not likely to be much of a solution to the key problems we face in health care today.
Now, the policy relevance of this debate, you know, is clear. It translates over into what seems to be a central correction these days, which is if youre concerned about doing something for the uninsured, you take a tax credit approach or you take a different approach. And the tax credit approach is predicated generally in most versions of it--certainly the Bush Administrations approach is predicated on the idea that the way you deal with the problem of the uninsured is to give people who dont have insurance coverage tax credits and allow them to go out into the individual market and buy the coverage. As Ive indicated, I think this is a fundamentally flawed approach because of the nature of the individual market.
The specific Bush policies also have some additional flaws which are not necessarily endemic to the individual market itself, but tax credits are too small really to provide an adequate subsidy for anyone who is of low income or low or moderate income except for people who are young, male, single and healthy, which is a significant segment of the population, but not the target for public policy.
Its also the case that, and most of the analyses that have been done of the Bush tax credits, indicate that theyre very inefficient in the sense that a large share of the benefits from the credit would go to people who have already bought health insurance on their own. Now, there is an equity argument for doing that, and many of these people are paying what most would regard as excessively high proportions of their income to purchase this insurance, but its not certainly a good way of solving the problem of the uninsured.
There is also an underlying belief, which sometimes those of us on the liberal side have been accused in engaging in massive social engineering. Some of those who advocate a tax credit approach seem to have something even more massive than we had generally conceived of in mine, because their goal is to really eliminate the employer based system and replace it with a individual market for health insurance which would be supported in some way by tax credits. Again, given what weve seen about the individual market, it doesnt seem to me that this is a very fruitful approach. It takes away cover that works reasonably well for over 160 million Americans, the vast majority of those who currently receive private insurance, and would seek to substitute something thats essentially untried on sort of a massive scale, and where it is tried in the current environment works very poorly.
Whats the alternative? You know, I have a little trouble. I can characterize the Bush administrative approach. Its hard for me to characterize the Democrat approach because were at this point I think somewhat all over the map, but I would say theres a kind of a traditional, what has become sort of a traditional Democrat approach over the last 10 or 15 years, which would say you pursue a two-part strategy. The first part is to expand employment based coverage, that is, take the system that we have and build upon it, and as Im sure most of this audience knows, 80 percent of the people who are uninsured are either members of the workforce or have members of their family are workers, and the vast majority of those are full-time workers. So a policy that got everyone insured who was connected to the workplace insured through the workplace would be the greatest single step we could possibly take toward the day when every American has adequate affordable health insurance coverage.
And all the studies--and there have been a number published in recent years, indicate that people who get coverage through the workplace are generally quite well satisfied with the coverage they do receive. And while there is poor coverage out there, most of the coverage people get from the employment based system is reasonably good for those who do have it.
The second issue is if you were to expand employment based coverage completely through some kind of employer mandate or through some other partial mechanism such as subsidies to employers to encourage them to insure their workers, how would you deal with the other 20 percent of the uninsured? And I presume that any solution you propose from them would also apply to people who are already in the individual market. And I think my own view is that the most efficient way of doing this and the most effective way that reduces the terrible burden of administrative cost, allows you to have community rating, and allows you to assure that everyone has a decent benefit package, is through an expansion of public health insurance coverage, Medicaid, SCHIP, some new variant of those programs.
Expansion of FEHB to a general population has also been discussed at various points.
Now, all of these policies have sort of technical issues that would have to be dealt with, that I think is a sort of a clearer solution that will guarantee every American the kind of coverage we want for ourselves and our families. Its a much superior approach to a tax credit program, which to my mind will never be successful, will never be delivered at the level that would provide significant benefits for large numbers of people, and is really an attempt to sort of foist a policy based on a kind of extreme ideology on the American people.
So with those, but I hope very balanced presentation, Ill close. Thank you.
Patrick Morrisey: You know, I always have the good fortune of going last at a lot of these presentations, and I think its for good reason, because after following the distinguished panel here, and of course, after hearing David, I was struck by the analogy that were just trying to put lipstick on a pig, because I think that while we all know that there are some problems within the individual market, this isnt putting lipstick on a pig. This is more properly taking care of a fine wine that could be refined over a number of years, if we store it properly and if we nurture it, if we make the right changes, if we put it in the right temperature, I think that the individual market can flourish, but clearly we dont have those conditions present now, but Id like to focus probably less so on what doesnt work.
Its kind of odd that Im on this panel, because I think the Energy and Commerce Committee and Chairman Tauzin, weve been very supportive of trying to find mechanisms to make the individual market work better as opposed to saying that its not a viable option because I think that consumers have spoken very clearly that this is something they care very deeply about, they care about the principle of consumer choice, and theyd like to see if furthered over the next few years.
I think that its important we look is to try to develop a political construct from which how we view this issue, and I wanted to almost use a test case, an issue which has been discussed to some extent today, and thats the issue of high risk pools. Its only one component of how we view the individual market, but I think its critical because any appropriate solution to some of the existing problems within the individual market will require a viable high risk pool system to be in place. And this construct that were looking at actually builds upon some of the successes that weve already had earlier this year.
Earlier this year, for the first time, we really took a step toward addressing some of the issues facing the uninsured and we had a tax credit that was the subject of a great deal of bipartisan discussion and finally a fair amount of support in both the House and the Senate, which should begin to be implemented within the next few months. And also included within that legislation was some additional funding for state high risk pools, 20 million of which would go toward providing seed money for high risk pools. As Deborah accurately points out, right now 30 states have high risk pools in place. Our first step was to say how can we encourage the other 20 to also put mechanisms in place? And then second we wanted to make sure that for those states who have high risk pools, that there was some affordability within them.
So when we approach the issue of the individual market, we actually look at 4 major principles. One, we look at the issue of affordability. And its critical when looking at that that a lot of the issues that were raised about the unpredictability of the insurance market get addressed, and we could do that in a variety of different ways. Once again using the high risk pool just as an illustrative example, because there are a lot of other issues that we could talk about today. Some comments have been raised about renewability and guaranteed issue, but given the limited time today, well spend a few minutes on high risk pools.
One, one of the things we did in the legislation which was signed into law is that we said that its important to provide a stable funding source in the states so that as Deborah points out, we want to build, instead of having 3 to 6 states which have very strong risk pool mechanisms in place, we want to make sure that the fundamental problem facing risk pools, which is principally the lack of revenue, that we will be able to provide an additional federal carrot, so the states will get more resources, and yet at the same time they would be encouraged to obtain those resources because they would have to in order to obtain the money that was set up in the legislation. They would have to actually provide policies which would not exceed 150 percent of the average policy within that particular age class, and while clearly that may be a small step, that may be one mechanism to start to reduce some of the high premiums faced by those who are in high risk pools.
Second, were looking at the issue of access, and whenever you talk about access, you have to always keep in mind that if we develop an infrastructure within the state insurance markets which builds regulation after regulation after regulation in place, then the insurance products will not develop. And weve seen whats happened in a variety of states. When you look at New Hampshire, you look at New Jersey, you look at Kentucky, the individual health care market has not had the ability to really develop and flourish, and for many of the reasons which were pointed out by members on this panel. But part of the reason is that if you have a guaranteed issue structure in place, absent a very viable risk pool, then thats going to create an environment where many of the insurance carriers would likely leave the state. So we think we could have a better system and we could alleviate some of the rationale--take away some of the rationale behind the guaranteed issue if you have viable high risk pools in place.
Then our third principle would be quality. We think that when you look at the individual market, there are some issues as to the quality of the health policies that are currently out there, and right now the HIPAA rules actually are fairly minimalist to the extent that youre only required to have two plans with varying deductibles. Well, that could mean an awful lot, so we think that there could be better standardization and we think that states should look very closely at the NIIC model legislation, or also there are other opportunities to look at FEHB style models to ensure that state high risk pool has a more workable benefit structure in place. And to the extent that once again we address the affordability issue, we address the access issue, we address the quality issue by ensuring that there are multiple comprehensive benefit structures in place and those that are affordable to consumers than the market would have a better opportunity to develop.
But I would like to end on the note of the principle reason why we want to focus on the individual market is because once again this is something that consumers are very interested in, and consumers want to have the ability to better direct their health care choices, and when you look at the advent of the Internet and you look at the information age and all the material thats available to consumers to be able to make positive choices about their health care decisions, this could be an incredible opportunity to further refine this market and address some legitimate issues that are raised, but its not something that could be resolved--the issue of the uninsured is not something thats going to be resolved through one particular model.
Its not going to be resolved by addressing issues solely pertaining to the individual market or solely pertaining to the employer based health coverage or clearly not by increasing the public health infrastructure. If people were in our shoes at the Energy and Commerce Committee or in the congressional staff vote and heard the numbers of people who are coming to us on a daily basis, asking us for resources to address some of the funding crises that are occurring with SCHIP and Medicaid, thats a false option.
We have to be very realistic about the dollar figures that we have and we need to do this in an incremental way, and we have to recognize that right now we have a very segmented market. We have Medicaid and SCHIP for a certain core of the population, which should be preserved and strengthened. We have an employer-based market which covers about 130 million Americans, and we have a growing individual market where the appropriate changes could be an effective tool to lower the ranks of the uninsured.
So a lot of very important issues were discussed today, and I think when you look at high risk pools, which we think is an illustrative example of one way to improve the individual market, there are opportunities for legislative progress next year. So I know that coming at the end of this distinguished panel, there will be lots of opportunities to take comments, but I just wanted to present probably a slightly different perspective than that was heard today.
Paul Ginsburg: Well, weve really been very fortunate that not only did we have such interesting presentations by this panel, but they kept to their times, so that there is time for you, the audience, to ask them some questions. So please come to the microphones. And I would appreciated that when you ask a question, if you could identify the panel member that its being directed. The thing we dont have time for is for all 6 to respond.
Question: [Off microphone] -- about high risk pools. Why is it that we continue to look at high risk pools as insurance, needs to be insurance mechanism? Why can they not evolve to being a backstop for other carriers? And as Kathy put it perfectly, I mean, at any point, youre high risk at a certain point, and then you evolve into being all fixed up and patched and healed. This would present more options for people in the market and--I mean Debbie, you are right, some of these high risk pools, youre not covered for the condition you need coverage for for months and months. Once you get fixed up, you go and look. If thats your only alternative, you have no incentive to purchase and become part of a healthy pool again. Why are we looking at high risk pools as being only an insurance alternative and not a reinsurance backup to all the other carriers?
Paul Ginsburg: Want to take that, Deborah?
Deborah Chollet: Well, I agree with you. I think the reason that they are what they are relates in part of funding, and it relates in part to this tacit noncompete. We dont make them accessible because insurers would like to retain as much of the market of course that they can and because they dont want to pay the subsidies that would make them affordable. And it would also give them adequate benefits.
Your issue related to--your question related to the idea of becoming sick while in an insurance plan is kind of an interesting one. There was a period of time in the 80s, late 80s or late 90s, when virtually every state passed reinsurance statutes. And they were essentially opposed and subverted by the large insurers, and said we dont need them. And in every state, as far as I know, those statutes have been allowed to sunset. So insurers themselves have eschewed, if you will, the fix, that particular fix on their business. So the answer is that the insurance industry hasnt wanted a solution in the nongroup market to this, and therefore we do not have a solution in the nongroup market. They may want it now. They may turn around and say, "We want it." But having this market work well for consumers has not been the priority thus far, and I think that Karen is exactly right. If we look at it from a consumer perspective, we end up with a lot of solutions, some of which have been tried, some of which have not been tried, but none of which has been proposed by the industry themselves.
Kathy Swartz: And Im actually going to disagree with that slightly because New York State is, I think a very vivid example of there the carriers did in fact go to the state and say, "We want a reinsurance mechanism," and the state, in its Healthy New York program as well as its individual market, its not the subsidized portion of Healthy New York, has exactly what Im proposing. And it is a case where the states regulatory capabilities, its powers, in some ways by telling the HMOs that they had to participate in these markets got the HMOs in turn to come back to the state and say, "We need help in this. We need relief for these very, very high costs." And I think it is a significant event that New York State has acknowledged its responsibility for the cost of very high cost people. Now, theyre able to do that with the tobacco settlement fund, so you know, what was going on in the 80s is not where we are now with the individual markets.
Paul Ginsburg: Patrick, do you--
Patrick Morrisey: I think as weve been looking at this issue over the past few months, one of the principles thats plagued our ability to solve the problem with high risk pools has been the stable funding source, and whether you want a high risk pool to function simply as a backstop in the individual market or whether you want it to be even broader, a lot of that is always dependent upon how you answer the question as to the dollars that would be available for high risk pools. Last year I believe that the shortfall within the 30 states was about $90 million. Thats part of the reason why we were able to put about $80 million in in the legislation that passed in the fall, but thats clearly a short term fix.
And what you may hope for is that if the insurers in the states are not going to be willing to put up and adequate contribution to make these risk pools more viable, that we could have a federal carrot, if you will, that some resources could be available, made available on the federal level to the states, once again to the extent that some of the policies may be made more affordable, so it could be a combination if you will of some new federal resources which are assisting the funding stream, but also then the assurance that the states are going to set up and have adequate resources into the future.
So were trying to find ways that we can better address the adequacy of the funding mechanisms within high risk pools, which has clearly been one of the biggest problems, and you cant have comprehensive policies within state high risk pools if youre going to see continual shortfalls, so its something that we need to have addressed.
Paul Ginsburg: Yes?
Question: Rose Chu, Actuarial research. This is a question for Mark Hall. We havent talked about the absolute magnitude of broker commissions, which is 15 percent to 20 percent of premiums, and if were talking about a $5,000 family policy which is low for employer sponsored but probably typical for individual family, thats $750 to $1,000.
Now, the health alliances for small groups try to reduce the broker commissions which were lower for small group, and they couldnt. Do you think that Internet sales or direct sales can make a dent in these broker commissions?
Mark Hall: Well, thats a good question. First of all, the 15 or 20 percent is typically the first year commission, and then renewals may be half of that. But I think the experience with the small group versus in cooperatives, was that people really like using agents, and I think even more so the more individualized the purchase becomes. Its just a very confusing, worrisome decision, and you know, it remains to be seen. People buy airplane tickets on the Internet. Sometimes they buy cars. But whether substantial numbers of people will be willing to make this type of decision purely over the Internet, unless the carrier already has a very strong reputation, Im dubious.
Paul Ginsburg: Yes, next question.
Question: Tom Wildsmith with the Health Insurance Association of America. Id just like to note that yesterday we released the results of a study that I think bears on some of these issues. We surveyed our members for the results of their underwriting process in states that allow underwriting in the individual market. The data included results on half a million applications that were submitted to member companies. And I think the results are very similar to what you see in the overall article, the overview article. Of those applications that were underwritten, 7 out of 10 resulted in the offer of the coverage requested at standard rates. The declination rate was a little bit below 12 percent. The survey results are available on our public website, www.hiaa.org, and I think you would find them very interesting.
Paul Ginsburg: Thank you. Last question.
Question: I wanted to first certainly applaud the Center for Studying Health Systems Change and Health Affairs for holding such an informative and thoughtful forum on this very important issue, but I should introduce myself. Im Alice Weiss (ph) from the National Partnership for Women and Families, and actually my question is going to be directed at Patrick Morrisey.
I was specifically interested in the comment that you made about consumer choice and consumers wanting this, and in hearing your comments I was particularly struck by a conversation that I actually had last night with a woman who had recently moved to Virginia and was trying to buy health insurance coverage in the individual market. What she found, unfortunately, was that there was no coverage available for her to buy in Virginia that provided maternity coverage because maternity coverage is not a mandated benefit in the individual market.
And in order for her to get coverage she had to either first get pregnant and potentially join her husbands plan, or perhaps her family had to sort of lose enough income to maybe qualify for a public program so that she could get coverage if she got pregnant.
And I just wanted to sort of underscore the idea of consumer choice and what consumer choice means, because I think a number of consumers feel like they would like to buy health insurance that provides them with the comprehensive coverage they need, but its just not available for them to buy at an affordable rate, and I sort of wanted to ask you about what youre hearing in terms of what consumers want, because certainly from the partnerships perspective, when we talk to individual consumers and we understand whats out there in terms of the policy surveys that are done, it sounds like consumers really want comprehensive, affordable coverage. It may be the case that some consumers want less benefits, but when they have--when they are sick and when they need the benefits, they want them available.
Patrick Morrisey: Well, last night also I went on the Internet and I tried to do an illustrative search of what some policies would cost in different parts of the country. I didnt happen to put in a zip code for Virginia though. Its interesting because clearly theres a great deal of variability with respect to the quality of the health coverage thats going to be offered within the individual market, and I would say that my comments today focused principally on the high risk pools, should not be construed to say that all is well within the individual market. There clearly needs to be some reform. Its just that the principle underlying the individual market is important enough that we have to push forward.
Now, in the state of Virginia, for example, there are no high risk pools and the individual market has been--my understanding has been fairly spotty. So I think that a lot really is dependent upon the state that youre in, which is once again going back to the issue of how can we set up a more stable funding mechanism to ensure that the benefit package thats offered is more comprehensive, that it may not be linked to the existing HIPAA definition, but we should be willing, and the state should be willing, to go beyond, to look at the NIIC model, and also to look at some other analogs in place, some actuarial equivalents to FEHB, et cetera. I mean there are other solutions to this that we should be willing to explore.
Paul Ginsburg: David and then Karen, and then well stop.
David Nexon: Just on this issue, I mean all of us favor a choice, and you know, and sort of a generalized value, but I must say choice in the individual insurance market is not something that I in my personal experience have found that people value. What theyd like is a good solid patient bill of rights so they dont get abused by HMOs. But, I know a lot of self-employed professionals who have individual coverage, and I dont know one of them that wouldnt prefer this kind of stability and reliability of having a good employer based plan.
Paul Ginsburg: And Karen.
Karen Pollitz: Id just like to add too, at the risk of sounding like a heretic, that consumer choice is really not all that different from adverse selection. When you offer two plans, one that covers maternity and one that doesnt, and you give people choice, the pregnant ladies will pick the one that cover maternity, and the price of that plan will not reflect the population cost of delivering babies. It will reflect the cost of delivering all those babies in that plan.
So I think we like to look at the individual market because it seems to promote choice and you can kind of tailor your own benefits, but you cant get very far in a market without completely destabilizing it unless you have some standardization, and you just sort of say this is what health insurance covers, which is pretty much what the population needs when it gets sick. And until we can get that in this market, I think it will continue to be as vulnerable and as volatile as it is.
Paul Ginsburg: Id like to thank this panel for doing a terrific job.
Paul Ginsburg: And well take a 10-minute break.