This story today in the NY Times is sad but should be expected. Read it closely.
Chaim Benamor, 52, a self-employed renovator in this Baltimore suburb. Mr. Benamor never found it necessary to buy insurance before having a mild heart attack last year and now, 13 years shy of Medicare, has little hope of doing so.
Here is a classic free rider. He is 52 and has never had health insurance. The usual free rider is a young adult who is healthy and who is convinced he or she will never get sick; or at least won’t get sick during the very limited time frame these people consider. The young free rider worries, if they worry at all, about accidents but they reassure themselves that a big medical bill due to an accident can be dealt with by bankruptcy. Now, we have a man with two problems. He is old enough to have possessions that would be seriously affected by a bankruptcy, and two, bankruptcy cannot be used again for years.
Mr. McCain’s proposal stands in sharp relief to that of his Democratic rival, Senator Barack Obama of Illinois, who wants to require insurers to accept all applicants, regardless of their health. That is now the law in five states, including New York and New Jersey.
For those who can afford the premiums, or who qualify for subsidies in the 13 states that provide them, the high-risk programs can be a godsend.
This does not solve the problem of premiums for these high risk policies. Obama’s plan does not require mandatory purchase of insurance, as Hillary’s plan did, and so it does not solve the riddle of the free rider. The risk pool plans are also a poor solution.
A fifth of the 14,000 participants in the Maryland plan receive subsidies that drop their premiums below the market rates charged to healthy people, said Richard A. Popper, the plan’s director. But many in the middle find the policies both unaffordable and intolerably restrictive, and Mr. Popper estimates that two-thirds of those eligible have not enrolled.
A comprehensive plan, to use Senator McCain’s term, will be necessary. I have previously suggested that the French model is a useful one.