• How much medical underwriting occurs?

    There should be a name for a post like this. I’m going to give you a little data, extrapolate a bit, and then go limp, letting you draw your own conclusion. In the comments you can suggest what to call this. (Data grenade? Number bomb? Deal and ditch? Share and shrug?)

    From Mark Pauly’s Health Reform without Side Effects (ungated):

    A recent study by America’s Health Insurance Plans (AHIP) of nearly two million applicants for individual insurance showed that only 10% were excluded from coverage by medical underwriting.

    Let’s assume that the 1.8 million that were not excluded actually enrolled. Today there are about 14 million individual insurance policyholders in the US. That suggests about 1.6 million experienced medical underwriting.

    Given I’ve made some assumptions and based this on one study, I don’t put much faith in my estimate. However, it is not terribly far off from the figure implied by the results of one of my papers.

    What does one do with a number like this? It’s a lot of people, many of whom may not be able to obtain insurance any other way. But it’s not a lot relative to the entire uninsured population. And so … ? (See how you could go either way with this, particularly if this is the only problem in health insurance you consider?)

    • Do you think that “excluded from coverage” means “were offered no insurance product?” If so, this number tells us nothing about those who were offered an insurance product at sky-high rates. And, indeed, a theme in Pauly’s book is that if you let insurers price risk as they see fit, they will virtually never “exclude” anyone.

    • Seconding Paul’s comments; and is there some control in that for where the application was made? States with guaranteed issue requirements (but allowing sky-high costs) probably look different than states without guaranteed issue requirements (but requiring community rating). States with high-risk pools probably absorbed the sickest of those who did not pass underwriting, as well.

      Might help explain why the federal high risk pool hasn’t picked up as many people as they expected.