"Suppose your cancer is in remission," notes the Associated Press in an article Friday. "You had to quit your job while you were having chemotherapy, and your employer coverage ran out. You can't find a private insurer who'll take you, but you're lucky to live in a state that has its own high-risk pool. Still, you have to struggle to pay the premiums, well above standard insurance because sicker people are in the group. Yet as the federal program is designed, you wouldn't be able to switch over and take advantage of significant savings."
"The reason: You have to be uninsured to qualify for the new plan."
Until 2014, under a provision in the Democrats' health care bill, people who qualify as "high risk" will have to go without insurance for six months before being eligible for a new "high-risk" pool set up by the federal government. The new federal insurance pool is expected to deliver premiums that are 10 to 50 percent cheaper than current ones, with lower deductibles and co-payments.
In 2014, the bill will take effect in full, and insurance companies will be forced to offer policies to individuals regardless of pre-existing conditions.
An AARP spokesman called the provision "awkward." He said it was enacted as a way for Congress to lower the costs of the overall bill, which President Barack Obama wanted to come in under $1 trillion.
"None of us would want to see the program lock people in to the more expensive existing coverage, but to switch over all those people would have definitely boosted the cost, and Congress was looking for ways to minimize it," John Rother, senior strategist for AARP, told AP.
So should you drop your insurance in July if you have cancer?
"That would be a very risky thing to do," policy director for the American Cancer Society Cancer Action Network Stephen Finan is quoted as saying. "Can you afford to go without coverage for six months in the hopes of getting a better price? It's a big gamble."
And even with the new pools, insurance companies are still working to protect their profit margins, even before the main components go into effect.
"Some of the largest U.S. health insurers are changing their accounting practices to book administration costs as medical costs in an attempt to circumvent new industry reforms, according to a U.S. Senate panel's report released on Thursday," Reuters reported.
The move appears to be an attempt to avoid the law's stricter standards for medical-loss ratio, implemented as a way of cutting waste. The law requires 80 to 85 percent of every premium dollar, depending on the plan, to be spent on medical costs.
By logging administrative expenses as medical, insurers can retain more of their income as profits.
The Senate Commerce, Science and Transportation Committee noted that WellPoint, Inc., one of the largest insurance companies, "has already 'reclassified' more than half a billion dollars of administrative expenses as medical expenses."