When you lose your job, you are likely to lose your health insurance.  This often happens when you are sick.  Obviously, health insurers will charge people more money, or even turn down their applications, if they apply for health insurance after they become sick.  As appalling as it sounds, this is perfectly reasonable.  Imagine if you tried to buy auto insurance to repair your car after you'd had an accident.  Nobody would think it reasonable to demand that an insurer write such policies.

So, most states still allow carriers to underwrite risk in the individual market; that is, to charge higher premiums or deny coverage to those who have pre-existing conditions.  States which outlaw underwriting suffer high premiums and lots of uninsured young people, because residents can wait until after they get sick to buy health insurance!

If the government freed American families to buy health insurance of our choice, by giving us our money back from our employers, the problem of insuring people with pre-existing conditions would mostly disappear, because health insurance would be portable from job to job and state to state.  (I wrote more about this in my analysis of Sen. McCain's and Sen. Obama's health proposals).

Until that happens, this heartless government policy will sentence many ill, middle-aged people to financial distress, because it prevents them from buying such portable policies with guaranteed renewable premiums.

Finally, a private insurer has come up with a solution to our fragmented coverage.  UnitedHealth Group will offer people the option of renewing their health insurance if they lose their jobs, or retire early.  (In financial lingo, this is a "call option").

Sure, it's a "work around", and UnitedHealth isn't giving it away: It'll cost about $50 per month.  Nevertheless, as long as the government keeps messing up health insurance, it's good to see that private innovation is figuring out ways to solve problems that the state creates.