H.G Stern at InsureBlog has a problem with the Wyden proposal:
First, it relies on a model called “Community Rating.” Basically, CR is the health insurance equivalent of “pay at the pump” auto insurance. It sure sounds nice: everyone pays the same rate, simple to administer, universal coverage (every car needs gas, right?). The problem is that not every car is the same, and not every driver has a flawless record. Same with health insurance: absent underwriting, folks who routinely run (and win) 26 mile marathons would pay the same as obese folks with diabetes. Thus, everyone ends up paying more.
Yikes -- that's quite wrong. For instance: The obese folks with diabetes end up paying quite a bit less. So do those who were once on antidepressants, or had hypertension, or were born with asthma. Community rating, where everyone pays the same, is a way of correcting for luck. That's not to say it doesn't end up flattening out virtue, at least to some degree, but the question is whether you think using the health care system, in general, is evidence that you're a bad person or had a health problem.
So let's, for instance, take the marathoner. You have any idea what Speedy McVirtue over there is doing to her knees? It's a wonder those things still bend. In a couple years, they may well not. Or she may step in a pothole, shattering her ankle. And it turns out marathon running can be dangerous for the heart -- shall we raise the premiums?
In other words, eventually, she'll be using the health care system too. If she has to pay a bit more in her years of good health, it'll keep her from paying far more than she can afford if things take a worse turn. Community rating, where we all share the risk for each other, admits that we don't have full control over these imperfect, glitchy machines we inhabit. Sometimes the failures are our fault; sometimes they're acts of God, or drunk drivers, meteorites. But we all have our flaws, and everyone eventually turns to Lady Luck only to see her frown. Community rating recognizes that, the current system denies it. I know which I prefer.
