Tomorrow, the Washington State Health Insurance Pool (WSHIP) Board will meet at the Westin Hotel in Seattle to continue its work to restore individual private insurance policies in the state. Their work has gone very wrong.

The deal that was cut to get insurers back into the market will take the sickest 8 percent and put them into a special pool funded by all insurers so the cost burden would not fall just on the three insurers that offered individual policies. But under current thinking, individuals in the pool will be subject to a system that grades applicants by rate of disease and weight.

What we did not know at the time the pool arrangement was made, is that the cost burden has changed. In fact, Premera and Regence made profits of $2.575 million and $3.104 million, respectively, on their individual policies in 1999, with the same group of people they always had.

What we did not know then is that this board is planning to create a point system based on an applicant's risk of disease and body weight. Equally troublesome is that some board members believe the board is not always subject to open-meeting and public-disclosure laws because of its private funding. And, the group developing the health rating system is the very group that gave us "drive-by deliveries" - the 24-hour limit on maternity stays - overturned by every state legislature and Congress.

A point system placed on individuals seeking insurance because they were laid off, or their dot-com went under, or simply took early retirement is an invitation to chaos. An insurance rating system based on how risky you are to get a disease is a battlefield. Battles will rage in Olympia as consumer groups and support groups fight over the points allocated for each disease. Court challenges will be made by those whose disease scored too high. This is a recipe for disaster. Then, we will once again be back to square one after squandering thousands and thousands of dollars that could have gone to patient care.

We do all this because three companies said they were not making money. We caved in to the demands of those who do the bulk of the business. It's time to change the rules of the game.

Three insurers - Premera, Regence and Group Health - dominate the market. If you tally up all their products and affiliations, these three plans account for 58 percent of the health-care marketplace. This does not breed innovation. Group Health has the smallest market share of the three at roughly 18 percent. PacifiCare, at fourth, isn't even close at 6.03 percent. We let the big insurers dictate the terms and conditions of this legislation rather than challenge their chokehold.

What we are doing is simply wrong, very wrong. Why? Because we are creating standards that apply to only one class of people - the self-employed, early retirees or dependents who have been dropped from the group market. We are holding individuals to vastly different and largely unjustifiable standards. Group insurance is not based on premiums by the pound or asthma or diabetes or genes.

If we let this board create a premium by point system and think that will solve the marketplace problem, we are naive. We have already sacrificed our elderly and our poor. Who else are we willing to give up?

If we go down this road, the governor, the attorney general and the Legislature must aggressively find ways out of this near monopolistic chokehold and put real competition in the marketplace.

Alternatives exist. We can expand the small-business market so individuals could be their own group. Or, say that every group of 99 or less would be eligible for group rates. We can insist that anyone who wants to offer group insurance in the state must offer an individual product in all parts of the state as part of the price of doing business.

We must claim ownership of our health care and not leave the rules of the game to the industry. We must claim ownership from the bottom up, not the top down. If all health care is local and all politics is local, then building this system must emerge from where we live and work and grow, from local to county discussions, to state discussions. If we know what we want, then we can work together to get it. This is not rocket science. We are just told it is.

We need health care that helps us sustain health, not penalizes us with points for potential diseases, or pound points, or health benefits mandated by the loudest lobby.

Kathleen O'Connor is a health-care-industry analyst and consultant based in Seattle, with over 20 years experience in the health-care industry. She publishes The O'Connor Report on health-care policy and politics.

Copyright © 2000 The Seattle Times Company

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