Cost of health care varies widely by state because of the McCarran Act

How would a family of five fare ... if they had to purchase their own health insurance? What would they face with no union to bargain on their behalf, no fellow workers to share the risks?

The IAM Journal tested what they might find on-line. Using www.eHealthInsurance.com, we entered a Maryland zip code and the birth dates for a husband, wife and three kids. Then we checked the non-smoking box and hit enter.

Up popped a bewildering array of insurance companies - some with unfamiliar names - offering 37 products priced from $150.00 to $1,176.00 per month.

Deductibles ranged from $10,000 to zero. And the co-pay went from $45 to not applicable. The plans were labeled PPO, HMO and Indemnity.

Price drove protection. If the family could afford $14,112 per year, they could buy BlueCross BlueShield's best product called Blue Preferred. Or, if the could only afford $1,800 per year, they might get BCBS's cheapest product, Personal Comp, the one with a $10,000 deductible.

Since insurance rates are regulated by the states under the McCarran Act, the IAM Journal re-entered zip codes for Ohio, Illinois, California and Texas. Same family statistics, same non-smokers - just a different zip code.

Entering new zip codes uncovered the McCarran malignancy. One company's plan - Golden's Copay35 - ranged from a low of $678.55 per month in Ohio to $988.55 in Illinois. What a difference two state lines made! The same plan costs an Illinois consumer 45 percent more - $3,720 more per year - than it does an Ohio consumer.

Even BlueCross BlueShield plays the state regulation game. The same BCBS Basic plan - using a PPO with a $1,000 deductible and 20 percent coinsurance - is available in California for $225 per month and in Illinois for $360 per month. What makes consumers in California 60 percent less risk prone than consumers in Illinois? Why is there a $1,620 higher premium for Illinois residents than Californians?

The short answer is the McCarran Act.

Passed in March 1945 as President Roosevelt grew weaker with his own death only weeks away, Congress created a malignant tumor - a slowly metastasizing cancer - that now devastates America's health care system.

The McCarran Act permits state, national and even international insurance companies to squeeze every last dime out of our health care system. The McCarran Act is the root cause of Premium $hock. It enables insurance companies to collect billions in unjustifiable and unconscionable premiums.

Meanwhile, doctors, lawyers, hospital administrators, drug companies, employers, unions and consumers form a bizarre, circular firing squad. Congressman Peter DeFazio wants to repeal the McCarran Act. If these stakeholders held their fire long enough, his bill might offer them a real solution to the problem of Premium $hock.


IAM's New Jobs Dept. Offers Health Care Help
In June, the IAM will open the doors to its newest member service department. The Department of Employment Services will provide valuable assistance to unemployed members trying to cope with the worst recession in years.

Former IAM CARES President Tony Chapman (below) serves as director of the new department. "Too many members face the sudden loss of employment with nowhere to turn," said Chapman.

Among the department's most valuable services will be an affordable alternative to COBRA insurance, the costly and temporary health insurance offered by the federal   government to unemployed workers.

"COBRA costs can range from $250 a month for an  individual to as much as $1,500 for family coverage," says Chapman. "Most workers opt for food and rent, leaving their health care to chance. The gamble can be lethal."

A choice of temporary or permanent health insurance policies will be available in most states for members and their families. The temporary program is underwritten on the spot, with coverage available the next day.

"This department is off to a great start. Offering our  out-of-work members what they need, when they need it most," said IP Tom Buffenbarger.

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