Health Care Bill Substantially Increases Premiums

One of the alleged benefits of the health care bill is that insurance companies will no longer be able to deny coverage  to persons with pre-existing conditions.  There have been numerous anecdotal stories of persons who lose their jobs, but can't get other coverage because they already have cancer or some other serious illness.  Nowhere in the health care debate did any member of Congress or the Obama administration, so far as I could discover, admit that this additional benefit would substantially increase insurance premium costs, not only for those with a pre-existing condition, but also for everybody in the insurance pool.

However, the New York Times as run in an interesting article on a laboratory state that already has a requirement that insurance cover pre-existing conditions.  That state is New York, which already has among the highest insurance rates in the country.  See New York Offers Costly Lessons on Insurance
http://www.nytimes.com/2010/04/18/nyregion/18insure.html?ref=todayspaper&pagewanted=all

The article explains the problem:

Premiums for individual and small group policies have risen so high that state officials and patients’ advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart.
The problem stems in part from the state’s high medical costs and in part from its stringent requirements for insurance companies in the individual and small group market. In 1993, motivated by stories of suffering AIDS patients, the state became one of the first to require insurers to extend individual or small group coverage to anyone with pre-existing illnesses.
New York also became one of the few states that require insurers within each region of the state to charge the same rates for the same benefits, regardless of whether people are old or young, male or female, smokers or nonsmokers, high risk or low risk.
Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where many of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the “adverse selection death spiral.”

As a result, "Since 2001, the number of people who bought comprehensive individual policies through HMOs in New York has plummeted to about 31,000 from about 128,000, according to the State Insurance Department."

 A further result is that the Governor of New York is now proposing to reregulate insurance rates. 

We now have two state laboratories, New York and Massachusetts, that have shown the disastrous results of many of the requirements in the health care legislation.  It is unfortunate that Congress did not pay any attention to them before passing the legislation.