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High Risk Health Insurance

It is relatively common knowledge that the cost of health insurance has exceeded even the most outrageous of forecasts in recent years.

Predominantly due to the downturn of the US economy and the steep increase in litigious action taken by claimants to an insurance policy, health insurers have been ardently protecting their interests after a number of class actions occasioned unprecedented damages awards, and in due course, the insurance companies factored this apparent increase in their exposure into the premiums and associated costs of obtaining health insurance coverage; this was necessarily passed on to the consumer.

Uninsurable uninsureds

Given that health insurance has become somewhat of a luxury to be afforded by selective sectors of the community, the plight of those with pre-existing medical conditions and those considered high risk and even uninsurable, has been verging on hopeless. The sterile and detached devices used by insurers to calculate risk is one that finds it impossible to provide coverage to some members of the community, and in some cases this may appear to be justified.

An increase in premium is the obvious solution, but apart from the fact that the elasticity of demand for insurance currently exhibits a tendency toward zero, in an age where the number of uninsured is growing, some cases of predisposition to highly costly medical care are simply not commercially possible. 

To some extent, the introduction of the Health Insurance Portability Act of 1996 gave some relief to the families of insured individuals who wished to change their employment circumstances without losing coverage due to a family member having a preexisting medical condition.

This prevented the operation of a pre-existing condition clause which became typically incorporated into insurance policies in the 1980's and 1990's.

Relief for the Abandoned

In a stroke of magnanimous and gratuitous relief, the Californian government recently agreed to trial a cautious program of limited funding to assist the so called uninsurable. The Californian government will subsidize insurance companies to provide sufferers of chronic illness with Californian high risk health insurance coverage.

The cost remains approximately 25% above the cost of insurance to an otherwise healthy person, but is a benevolent gesture in a time of such economic doldrums. Funding for the program is derived from taxes on tobacco and other medically disapproved products, but the funding is limited and may not cover all that are in urgent need of health insurance cover.

A number of insurance companies have agreed to be a part of this much needed community based program and include Blue Cross, Blue Shield and Pacific Mutual. Certain logistical limitations have been imposed such as the requirement that treatment be received by predetermined physicians and the beneficiary of the treatment must be a resident of California.

Particularly for person suffering from illness that has previously been considered uninsurable as to health care, the initiative shown by the Californian government is yet another brave policy choice aimed at directly addressing the urgent health care needs of the community. 


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