If you don’t have health insurance, don’t start a small business; individual markets are answer

One of the biggest complaints about health insurance is that people with pre-existing or chronic illnesses can’t buy health insurance at any price in the individual insurance markets. The reason is simple. If you haven’t been paying premiums into the risk pool when you are suddenly struck by an illness or have an accident, you can’t expect to pay a monthly premium and immediately begin filing claims for thousands or even millions of dollars. If insurers allowed you to make claims even though you hadn’t been paying premiums, they would be allowing you to steal and free load.

The some 14 million people who self-insure are incorrectly called “uninsured.” They are self-insured, not uninsured. They take the huge financial risk that they will be bankrupted, and when they are, they think and say it’s not their fault, it’s the “corrupt” system that leaves so many “uninsured.” Sorry, but it’s their fault. Yes, people with high-deductible catastrophic health insurance can be driven into bankruptcy by major illnesses, but at least they did the right thing in buying health insurance.
Marci Alboher writes in the New York Times about organizations that help owners of small businesses find health insurance. The key points of her article are that it takes some research and work to find the right policy that is affordable, and, as usual, small business owners complain about the premiums, which they must pay in full themselves because they don’t receive subsidies from their employers.

The answer to the small business owner’s health insurance situation is

that the best reforms that could be made to the health insurance markets would be to eliminate group policies and let all consumers buy individual policies that put them in huge community-rated risk pools without individual medical risk rating. As for the cost of health insurance, small business owners and other consumers don’t realize what bargains they get when they buy health insurance, which protects them from catastrophic losses that can quickly amount to tens and hundreds of thousands of dollars. A child can suffer a major accident or disease that is very costly to treat. But most kids survive such encounters with death and live long, productive lives that return many times the “investment” their parents and insurers made in the treatments that extended their functional lives. In short, the return on investment in health insurance is huge.

Most people who gamble by going self-insured have only themselves to blame when they get sick and can’t buy health insurance. The exceptions are obviously the mentally ill and incompetent. Most of those already are covered by Medicaid and other programs, but certainly not all of them.

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