Friday, October 30, 2009

Riders for Specific Procedures

Health insurance in the United States is shaped by many mandates . An interesting issue has arisen with respect to the debate over how abortion should be handled in health care reform. Now, this post is not intended to take a position one way or the other on abortion.  I have one--but that is not the issue here. Rather, this post is to prompt some thinking about what people should be required to buy.


Why do insurance policies have riders in general? When I purchase car insurance, I can purchase extra insurance to pay for a rental car while my car is in the shop or go without that coverage. When I purchase home owners insurance, I can purchase extra coverage against sewage from the city's water line backing up into my house or remain at risk for such an event. It is my choice whether to accept the risk or purchase insurance.

At present, there is discussion of whether abortion should be offered as a rider on health insurance policies. In other words, make the basic policy not cover abortion. Make insurers offer coverage for abortion as an "add on". We could apply the same logic to other procedures, but abortion is the current topic of debate.

Is this fair? The argument that this is not fair goes something like this. This is already covered without a rider. Making it a rider would make women have to anticipate an unexpected event. This would take away coverage they have. The argument that this is fair would go something like this. If it is already in most plans, then women are already paying for it. The whole point of insurance is to purchase protection against unplanned events (I certainly don't plan to have a car accident or have city sewer water back up into my basement). If someone has strict views that would preclude them ever having a demand for an abortion why should they have to pay for that possibility. If some women want to remain at risk, that is their prerogative. People who want the coverage can still buy it. It is just that their premium will then reflect the risk that they pose--in terms of the probability of the event and the cost of the event.  Just like any rider is priced in any insurance market.

It would be difficult to do this for every service because we don't buy health insurance "by the service". Suppose someone says they will never get a colonoscopy? Suppose someone says they will never get any specific procedure? Could they price their insurance accordingly? Probably not. So, the idea of riders may be impractical to apply broadly (beyond the abortion issue), but riders for insurance coverage that are left to the choice of the individual are not so different from the way that other insurance markets operate.

6 comments:

  1. its getting tricky isn't it, yikes. I am glad i am not there right now, for some reason, a lot of friends are in positions where insurance is really a tough thing to come by. This is a very tricky subject..aristea

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  2. Yes. And as more Americans continue to become uninsured it is even less clear what we can easily do to solve the problem and to make health care as affordable as possible without bankrupting the system.

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  3. Charrisse said...

    And the political battle underway on The Hill will only further complicate things. Asking women to purchase extra insurance for abortions is just another way of not covering them at all. I imagine that few women would buy add on abortion coverage given the relatively low cost of the procedure compared to many other outpatient procedures. Medicaid (depending on the state) already allows it. I think that most women would simply pay out of pocket. This will mainly present a problem for those women who fall in that gap between Medicaid eligibility and those who have private insurance offered by their employers. That's a quite a large gap...

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  4. Hi
    This will create a problem,I agree that it is impractical to apply riders broadly. How do we decide what services to bring at the inception of our health insurances. If we say we do not need a colonoscopy today, wht happens in the future when we need it. What happens to those who cannot afford to pay out of pocket and are not eligible for medicaid. edith

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  5. In response to Edith's comment one clear consequence is that we make the ability to withhold care to those who have chosen not to protect themselves a reality. However, recognize that this is an economic consequence and does not (and should not) represent an ethical argument. That would raise othehr important issues.

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