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the Medical Information Bureau, which has
your whole file. So if you’re healthy, the [insurance
company] would charge you $7,000 for what they charge
the company $14,000 because under their policy with your
company, they have to cover whoever is in the company.
But if they could choose to only cover the 90 percent,
they would charge them less.
What happens to the other 10 percent?
Two big things have happened that exploded the
popularity of individual health insurance policies. One
is that companies are allowed to pay for individual
policies now and can reimburse employees tax free. And,
starting in 2005, states are now required [by Congress]
to have state guaranteed coverage.
 For that 10 percent with health problems?
Yes, we’ve always had it for old people with Medicare,
and for poor people with Medicaid … But this is not for
poor people but middle class and upper class people who
have been rejected for an individual policy or have had
their policy rate [premium] upgraded because of a health
problem—or they have a letter saying one of those two
things would happen if they applied. That makes them
eligible for state guaranteed coverage.
Won’t it be much more expensive?
It is the identical coverage but two to three times the
[average premium price] in the state. Some states are
better and some are worse ... But healthy family members
could get individual coverage then get the unhealthy
person guaranteed coverage. So you can lock in a lower
rate for the other family members who are healthy.
I’d
never heard of the guaranteed state
coverage. Are many people enrolling in
it?
About 250,000 families as of April 2005
had state guaranteed coverage (or about
1 million people). But most were for the
whole family instead of for an
individual member. And I did research
and found that they were all upscale for
the most part. Many of them had used
their connections, whined and complained
about their child and gotten into the
state-covered insurance. But they didn’t
realize it was there for anyone. The
state guaranteed coverage doesn’t
advertise.
Why?
I realized that when I interviewed an
administrator who said, “Are you going to write about
this? If you write about this all these kids who have
cancer
and diabetes are going to call us and we can’t handle
them all.”
Let’s get back to individual health insurance
policies. You say they’re better, cheaper and safer for
most people than going through an employer.
 Why?
You can keep the insurance as long as you pay the
premium. You don’t lose it if you lose your job. It’s
permanent—meaning the price can’t go up for illness.
Individual policies offer the same benefits [as
employer-sponsored plans] but if you’re in the
90-percent healthy group, you could pay a quarter of the
price.
Are there any cases in which an
employer-sponsored plan is better?
There are rare cases, but three things must happen: you
can’t get individual insurance [you’re in the 10 percent
that’s not healthy]; you live in a state that’s terrible
for state guaranteed coverage, where it is much more
expensive than employer-sponsored coverage; and you are
sure that you will work there until some type of
permanent insurance kicks in. You’re either in a union
or you’re the CEO and you’re near 65 so you know you’ll
get Medicare.
Why do so few people purchase individual/family
policies?
Well, 14 million Americans have it.
Yes, but that’s still less than 5 percent of the
population.
Most people don’t know it exists … And even if they do
know it exists, they don’t realize that it’s often half
the price. In fact, most people think it’s twice the
price—and it used to be. That’s because years ago, they
took everybody. But that’s changed. Also employer group
insurance used to be much cheaper. And until 2003, a
self-employed person couldn’t take a 100-percent
deduction for their healthcare expenditures. Now, as of
2005, all employees also can have a 100-percent
deduction.
You write that employer sponsored group health
insurance will be “mostly eliminated” in the next 20
years. Why?
About 157 million Americans are on employer plans now.
Of that, most of them get employer health insurance and
are paying twice as much as they should … But you never
learn how to buy insurance here. That’s why I wrote this
book. This is not new legislation that we need to pass.
I am telling you what has already happened. Most
Americans don’t know how to purchase individual
policies. But if you’re in California, you’ll see
billboards all over [the highway] telling you to call
this number to enroll because you’ve got 22 carriers
vying for your business. I’m telling you, what is
happening in California now will be happening everywhere
soon.
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