Doubts About The In-And-Outers

Massachusetts has its own version of “health care reform” legislation, which is similar in some ways to the federal “health care reform” legislation.  For that reason, the current Massachusetts experience may be a precursor of what we could soon be facing on a national scale.

Yesterday that Boston Globe ran an interesting article that should cause concern among all responsible citizens.  The article addresses the phenomenon of what might be called “in-and-outers.”  “In-and-outers” are people who come in to the health “insurance” system only when they already need immediate health care, rack up health care costs that far outstrip the amounts they pay in premium, and then go out of the system when their need for health care ends.  The rest of the time, they pay a monthly penalty that is less than the monthly cost of the premium would be.  During the few months they are in the system, their average health care costs are far greater than the average health care costs of the long-term participants in the health insurance system. This phenomenon — which has created an imbalance in Massachusetts totaling in the millions of dollars — also could occur under the federal “health care reform” legislation.

Polls show that one of the most popular concepts in the federal “health care reform” legislation is the provision banning insurance companies from denying coverage to people who have pre-existing conditions.  As I’ve written before, I think this may only be because people don’t fully understand the point of exclusion of pre-existing conditions, which addresses one of the fundamental underlying concepts of insurance.  In reality, pre-existing condition exclusions hold down costs for responsible people who buy insurance to protect against future risk by preventing people from “gaming the system” by buying insurance only when, for example, they learn that they need knee surgery or have some other condition that requires expensive short-term treatment.  “In-and-outers” aren’t buying “insurance” against future risk because the risk is already realized.  Instead, they are buying a subsidy for their health care, and sticking the people who stay in the insurance pool long term with most of the tab.

This phenomenon isn’t fair, but it is predictable.  There always will be people who will try to maximize their economic benefit and take advantage of other people, without regard to fairness.  If the federal “health care reform” statutes don’t recognize and account for that reality of the human condition, it will be a significant problem for the rest of us.


Massachusetts Medicine

As Congress debates national health care and health insurance concepts, it seems wise to consider the actual experience of one state that has a universal health care law and mandates that every individual have health insurance.  This article discusses the Massachusetts approach and some of the cost and revenue issues it has encountered.