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February 03, 2008

Democrats push plans for affordable health insurance

Front-runners Hillary Clinton and Barack Obama, as well as former candidate John Edwards, who dropped out Wednesday,have put forth proposals to make health coverage more accessible and affordable.

Inspired by existing health reforms in Massachusetts, their proposals would prohibit insurers from rejecting individuals or charging them higher rates because of preexisting health conditions.

But forcing insurers to cover everyone won't necessarily solve the problem. States that have so-called guaranteed-issue laws, such as New York and New Jersey, have some of the highest health-insurance rates in the U.S. That means that healthy people in those states often decide not to buy coverage until they get sick, which further boosts costs for everyone.

Guaranteed issue could work if everyone were persuaded to buy coverage, spreading the risk among more people and pushing down prices. So Clinton, Edwards and Obama have each proposed a so-called mandate requiring individuals to be covered by insurance.

For example, Clinton and Edwards would require most employers either to provide coverage for their employees or to contribute to the cost. Clinton would exempt most small employers but offer them a tax credit as an incentive to provide coverage. Obama breaks with his opponents. He would require that all children have insurance but not all adults.

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Posted by healthinsurance at February 3, 2008 09:05 AM

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