Reform’s possible negative impact on payors

Don’t start cheering yet, but there may be a negative financial impact for payors.  How?

A fine will be imposed on people who do not get insurance.  The fine will be an annual charge of $750, far less than what insurance would cost.

People can opt-out of insurance until they are ill enough to require treatment.  Insurers  must provide coverage for those people. When healthy people pay premiums, the margins earned by the insurers are almost infinite.  If payors could figure out how to legally offer insurance to rocks and get the rocks to write a premium check each month, they probably would.  (Can’t you just see the business development people getting sweaty palms over this idea?)

When healthy people cross over to the dark side–going from insured to patient–margins go from infinite to very negative which is why it there is no business model that works if all you do is insure sick people.  To really mess with their minds and their margins, all that needs to happen is for people to opt-out of paying premiums when they’re healthy and opt-in when they are sick.

Of course, payors will build this into their actuarial tables, and simply pass on the cost  of these occurrences to the rest of us thereby making it a wash for them.   Well, the idea that the payors might be adversely impacted was nice for the minute it took to read this.