Replace ACA with private-sector solutions

Years ago the insurance industry solved availability/affordability problems for automobile insurance, workers' compensation insurance, windstorm insurance in warm water coastal areas and property insurance located in riot prone inner city areas.

These were called residual markets and mechanisms were created to provide the insurance and pay claims with little or no government involvement. Until now, the only federal government involvement in insurance is the Federal Flood Insurance program, which is totally different because there is no way to spread the risk. It did not attract the political attention that occurred with other lines of insurance.

Every poorly designed insurance program has an insurance bugaboo called adverse selection. That means it will not attract a representative cross section of the market which is key to its success, and that is exactly what has happened to Obamacare. Simply put, not enough healthy young people have applied to the exchanges while people with health problems gravitated to it en masse.

Can residual market health insurance problems be handled in the same way as the problems in the property/casualty insurance area? This writer with 35 years experience in the insurance business says yes.

With appropriate changes in the way health insurance companies are licensed and regulated, an effective mechanism can be designed to handle the problem of pre-existing conditions and spread the risk throughout the health insurance industry. But it will have to be done quickly because the number of health insurance companies is dwindling due to the ACA.

Individual and employee group plans should return to where they were before the Affordable Care Act. Retainable parts of the Act, such as allowing 26-year-olds to stay on their parents' plan, should be considered, but the law must replaced with private sector solutions such as those in place for other types of insurance.

Robert C. Haase

St. Charles