During today’s Health Committee discussion of a high-risk health insurance pool, Reps. Verla Insko and Hugh Holliman stated that the pool would help reduce the amount of uncompensated care and thereby save money for everyone.
I have written in support of a high-risk pool financed from the General Fund. A high-risk pool has good effects of its own and can make the rest of the discussion of health care reform much more productive.
Insko and Holliman, however, suggest that the $2/month/insured life assessment (read: tax) on insurers is actually a savings because of the cost of uncompensated care. Uncompensated care nationally accounts for about 2.5 to 3.0 percent of health spending. If anything, the overinsured add more cost to the system.
Uncompensated care is usually provided in geographically concentrated hospitals. The assessment applies to less than half of all insured people in the state. To the extent that the pool relieves uncompensated care, it should be financed with a tax on hospital beds. Benefits of a high-risk pool, however, accrue more broadly and so the pool should be more broadly financed.