Close the coverage gap--it's not rocket science; it is actuarial science

Published August 5, 2021

By Peg O’Connell


I am an old insurance lawyer. Yes, I admit it, I am old and I practiced insurance law for many years before becoming a public health advocate.  These are two great confessions that I don’t think are a surprise to anyone.  I care about closing the health insurance coverage gap because it is the right thing to do for improving the health of all North Carolinians and it also the right thing to do to help reduce the health insurance costs for everyone in our state.

Insurance is a business about big numbers. It is not rocket science; it is actuarial science.  The more people who are insured, the bigger the spread of the risk and the less the cost to each individual insured or insurance purchaser. This is one of the many reasons that it is so frustrating that North Carolina remains one of the 12 states that has failed to close its coverage gap. 

Those of us who have private insurance, employer sponsored insurance, the State Employees Health Plan, marketplace insurance or even Medicare [that is me, now] pay more for our insurance because we have such a large uninsured population and close to 600,000 in the coverage gap.  Those who have no health insurance still need care—but sadly, they often get it at the last possible moment in the most expensive place—the emergency department.  Much of this care is uncompensated and in order for providers to survive, the cost is passed on to other patients and their health insurers—and the cost of insurance goes up for everybody.

According to a 2018 issue of the Journal of Health Economics,[1] closing the health insurance coverage gap helps reduce individual health insurance premiums and states that have closed their coverage gap experience an average of 11-12% lower rates across health insurance plans than states that have not found a solution.  In fact, the latest information coming from Johns Hopkins School of Public Health and Georgetown School of Public Policy indicates that states that recently closed the coverage gap experienced a 15-16% reduction in their average individual insurance rates. 

This is a big deal! When businesses are looking at setting up shop or relocating to a new state, they look at the cost of doing business and at the top of the list is how much it costs to insure workers. Can we really afford to be so cavalier with the prospect of new businesses choosing North Carolina?  
Closing the health insurance coverage gap will help so many working people in the gap, but will also help every employer, Medicare patient, and privately insured person in the state.  It is time North Carolina—it is time to close the gap.