There is a cliché that says something about those who don’t study history are most apt to repeat it. In the early 1990s Governor Mario Cuomo launched health care reform in New York State. It was suppose to increase competition and lower costs.

They codified community rating and guarantee issue policies. One Insurance Company, Empire Blue Cross and Blue Shield was already following these rules and had become the company of “last resort” to those who could not find other coverage. Within a few years, Empire had been found guilty of misleading regulators about its’ losses and stopped selling insurance in the State. Only two standard plans were left selling insurance in the State.

Today the average premium for an individual in New York is $9,036 per year. Family coverage averages $26,460. The same inflation occurred in Massachusetts that legislated Insurance Reform.

Stephen Parente and Tarren Bragdon offered this most reasonable proposal in the Wall Street Journal today.

“In a recent study conducted for the Manhattan Institute, we estimate that market-based reforms could make insurance much more affordable, especially if the Community Ratings and Guaranteed Issue mandates were repealed. Doing that would reduce the number of uninsured by 18% and 19%, respectively (37% combined), and would lower premiums by 42%. We also found that if the state allowed New Yorkers to buy health insurance sold in Connecticut and Pennsylvania, as much as 26% of the uninsured would purchase private policies costing 25% less than similar policies in New York. Offering mandate-lite plans to those younger than 45 could reduce the uninsured by nearly 10%, with an 18% decline in premiums.

Market reforms won’t provide affordable coverage to everyone, so we suggest creating guaranteed-access risk pools for those with chronic diseases. Currently, 35 states have such pools. They could be financed in New York with a modest assessment on policyholders in the individual insurance market of as little as $6 per member, per month.

President Obama has called for insurance market reforms. We agree they’re needed. Based on New York’s experience, Congress should concentrate on changes that make the individual insurance market as competitive and affordable as possible. The right reforms would reserve scarce tax dollars for those who really need help and encourage more healthy people to buy insurance. “

Unfortunately, as far as I can tell our legislators are acting more like the New York legislators of the 1990s.than people who really care about lowering cost. At some point this government is going to have to work on lowering cost rather than just throwing another trillion dollars at our problems. It is our children’s financial future that they are spending.

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