Gaming The Health Care System

The Boston Globe's Kay Lazar reports on a troubling practice that insurance executives say is driving up health care costs in the state. Thousands of Massachusetts residents are signing up for health insurance just long enough to get expensive medical care — such as fertility treatments and knee surgery — and then dropping the insurance plans abruptly, Lazar writes:

In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.

The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month. The previous year, the company’s data show it had even more high-spending, short-term members. Over those two years, the figures suggest the price tag ran into the millions.

The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round. This is also the case under the federal health care overhaul legislation signed by the president, insurers say.

Consumer advocates, however, tell the Globe they are not convinced the phenomenon is really as widespread as insurers say.

The advocates point out that "many of the individuals buying on the open market are likely those who are between jobs, new to the state, or have some other legitimate reason to buy coverage for a short period. They said that before the state makes it harder for consumers to buy coverage, there should be reliable data showing the extent of the problem," the Globe reports.