PPACA – Elementary Insurance Principles Under Stress

“Guaranteeing health coverage to anyone who applies  strips insurance companies of their ability to mitigate moral hazard where individuals wait to purchase insurance when they are sick or in need of medical attention and drop coverage if they recover…… the collapse and redistribution of rate bands and ratios and the limitation of underwriting factors will reshuffle the insurance underwriting deck ………………….”

http://chaoco.com/Data/Files/Market%20Reform%20-%20Guaranteed%20Issue%20and%20Insurance%20Rating%20under%20ACA.pdf

Editor’s Note: Will property casualty cover be next? Wouldn’t it be cool if you could run down to the State Farm office 24 hours before Hurricane Obama hit your property to get adequate coverage for wind, flood and personal property? Pay for insurance only when you need it!

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