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Health Care Reform and Pre-Existing Conditions

I actually have to agree with the president’s signing statement when it comes to pre-existing conditions. I know, I know, I’m a squish, but it’s TRUE.

“For too long, tens of millions of Americans have been denied health insurance coverage because they have preexisting conditions. We have all heard their stories. A husband and his pregnant wife lose their insurance and then find they cannot buy new coverage because her pregnancy is considered a preexisting condition. A young woman starting out in her career cannot accept a promotion with another company because its health insurance policy won’t cover her diabetes. A small business owner faithfully pays his group health insurance premiums for years only to learn that his coverage won’t be renewed after one of his employees develops a heart condition. Since taking office, I have been fighting for changes that would stop this kind of unfairness and make health insurance more accessible for all people, including the most needy.”

Of course we should all agree with this. He also said:

“This legislation will set into motion several key reforms. First, it will eliminate the possibility that individuals can be denied coverage because they have a preexisting medical condition. Second, it will require insurance companies to sell coverage to small employer groups and to individuals who lose group coverage without regard to their health risk status. Finally, it will require insurers to renew the policies they sell to groups and individuals.”

As PRI’s John Graham pointed out, and as you may have guessed, I’m playing a game with you. The president I’m quoting is Bill Clinton, when he signed the Health Insurance Portability and Accountability Act in August 1996. It had just passed the House of Representatives by a vote of 421-2, with leading Democrats like Nancy Pelosi onboard at the time. The Senate passed it unanimously by 98-0.

Now, HIPAA’s a flawed effort for reform, and supporters like Dick Armey have acknowledged that. But the fact is that many of the most popular aspects of Obamacare have been the law of the land for a long time, and don’t go away when it’s eventually repealed.

As Avik Roy, Peter Suderman, and Michael Cannon have written, this week’s claim by HHS that those with pre-existing conditions will be unfairly penalized — and that this number amounts to millions upon millions of Americans, as many as “1 out of 2″ elderly persons — is just exaggeration. HHS’s own data show that less than 1% of Americans have ever been denied coverage for any reason, including fraud (which is usually the reason). That’s just one of the reasons that only 8,000 Americans have applied for the vaunted new risk pools.

Of course, the repeal bill passing tonight is just the beginning. There are plenty of questions that come next, and Republicans need to be prepared to answer them.

Benjamin Domenech is a research fellow for The Heartland Institute and managing editor of Health Care News.

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COMMENTS

  • BigGator5

    There is a problem and a solution to this point:

    Problem: If you stop the Pre-Existing Conditions, then people will jump on and off insurance whenever they get sick.

    Solution: The solution is not the Individual Mandate, but allow insurance companies to keep you on the plan for a time period.

    Ok, let’s say I don’t have dental insurance. Something comes up, and I feel now is a good time to get dental insurance. When I sign-up for a plan, I am on that plan, for example, six months. After the six months, I can leave whenever I want.

    Cell-phone companies do this all the time, so I don’t see why insurance companies can do this as well.

    • drfredc

      As you noted, the issue with pre-existing conditions is there has to be rules so that you can’t just jump on and off insurance at one’s whim. If you’ve been paying into the system $X/month and $X/month is enough to you finance care for all health problems you might run into, great. You get a gold star. Note : Having insurance necessarily doesn’t mean your insurance will pay your entire HC bill — rather, it will help you finance and pay all or part your care, depending up the type of coverage you’ve got.

      If you’ve skipped a few months, or a few years of coverage so you can buy that new boat, or get the deluxe Comcast HD TV package, or whatever, minimally, the cost of you not carrying coverage is $X/month times the # of months you (and family) have gone without coverage. If you’ve got this money in the bank, fine — one option is to require you to fork it over when you need coverage or care… Or perhaps, if you haven’t saved up, carriers can offer a financial package to help you make up your missed back coverage over time — there’s all sorts of financial options possible… Or carriers can charge the personally responsible folks more while the irresponsible folks splurge on personal irresponsibility. A large part of Obamacare is about implementing this last solution — promoting irresponsibility over responsibility and making coverage of any sort significantly more expensive in the process.

      Please note : NONE of the discussion above is really about pre-existing conditions. It’s about how to finance individual & family coverage of all essential health care needs on a regular or irregular basis. The unescapable reality is the cost of 6 months of coverage as you suggest isn’t going to cover any really big health care costs… Unless the costs for that coverage are very very high…

      Reality Check — with an aging population, costs are only going to go up and up as this aging population’s health care problems become more and more complex. Anyone who says they can make costs go down by lumping everyone into a couple gubermint big plans is lying, and their lies don’t deserve to be spread and labeled anything less than a lie.

      Final Reality Check — Simple solutions are possible to the complex issue of financing the Health Care SocialMarketplace — they all revolve around promoting (not mandating) personal (and family) responsibility in the marketplace.

  • BigGator5

    There is a problem and a solution to this point:

    Problem: If you stop the Pre-Existing Conditions, then people will jump on and off insurance whenever they get sick.

    Solution: The solution is not the Individual Mandate, but allow insurance companies to keep you on the plan for a time period.

    Ok, let’s say I don’t have dental insurance. Something comes up, and I feel now is a good time to get dental insurance. When I sign-up for a plan, I am on that plan, for example, six months. After the six months, I can leave whenever I want.

    Cell-phone companies do this all the time, so I don’t see why insurance companies can do this as well.

  • rowdydfw

    I’ve listened all afternoon to the democrats hue and cry over pre-existing conditions, pre-existing conditions, woe is me, I couldn’t get health care because of pre-existing conditions. They’ve trotted out every sob story imaginable over pre-existing conditions and lifetime caps.

    If that was all that was wrong with health care, they could’ve passed a one page bill that would stop the insurance companies from denying policies due to pre-existing conditions and stop them from lifetime caps! They could’ve done it in less than one page, four years ago, and been heroes!

    Instead they CHOSE to throw socialized medicine down our throat, with so much hidden agenda in it, it’s hard to tell whether it’s a health, or education, or IRS, or gold purchase, or re-distribution of wealth bill with 2,000+ pages of babble, the majority of which is unconstitutional.

    They CANNOT mandate that I buy health care. They CANNOT mandate who gets health care! They CANNOT mandate that the states provide health care for every single person whether they’re a citizen of that state or not! They cannot mandate that I have to pay for somebody else’s health care!

    Ask yourself what in blue blazes was a 1099 request for purchases over $500 doing in a freaking health care bill?

    • eastbaylarry

      “Ask yourself what in blue blazes was a 1099 request for purchases over $500 doing in a freaking health care bill?”

      This stomps small businesses twice; once by the large increase in bookkeepping costs and again when large businesses drop the smaller suppliers in an effort to reduce their bookkeepping costs.

  • tdawg89

    it presents a problem if the GOP wants to keep the pre-existing condition clause. THe individual mandate is what provides the revenue for it. They go hand in hand.

    • JoeG

      The system as it is works pretty good to keep people from bouncing on and off insurance with no penalty to those who stay on insurance all the time.

      Without mandatory insurance and without pre-existing conditions, insurance companies will be bankrupt in no time.

      • jyalai

        Insurance is a risk transfer tool. When the risk is 100% nobody is going to buy the risk, or they won’t be in business very long. The answer to helping people get medical care is not in forcing other people (insurance companies) to pay for everyone’s medical care. That will effectively get rid of insurance companies. Something that Obama seems to be fine with.

  • http://freedom-light.org solvoreor

    Reality check.
    Not every body that is uninsured dumps their medical bills on the tax payer.

    There are plenty of charities
    There are people that actually pay for their services.

    And someone like President Obama could afford to pay even extensive medical expenses for their children should they require care but not be personally insured.

    The big advantage for the rich is that they get to transfer the cost of medical care for their children to the working stiffs. After all somebody is paying for this now but not everyone stiffs the tax payer. But once Obama Care transfers the cost to working people by raising their premiums the rich will get off the hook. No more dipping into the trust fund to pay for little Billy’s drug rehabilitation and STD treatments.

    So who gets the bill, working people
    Who gets the benefits, the rich trust fund elites.

    Who needs this?

  • Common_Cents

    We shouldn’t really be discussing any health care issues as some national plan, what to do about pre-existing etc…

    The only thing that lowers prices for everyone is competition. That is what we should be focusing on.

    This should be a states issue, having 50 grand experiments.

    Overly restrictive national policy just prevents insurers from pricing risk.

    Additionally, there are two separate issues that get lumped together. One is how to make health care more efficient and reduce costs(maybe focus on prevention?). The second is HOW we pay for it. The amount you pay and how you pay are TWO distinctly different things. Govt wants socialized payments which cover up many inefficiencies and dilute high prices among a larger group. That system promotes inefficiency and will eventually sink everyone.

    • skorrent1

      The only thing I would add is that neither “how much you pay” nor “how you pay” has anything to do with “health care”. That’s “are you satisfied with what you’re paying for”, and that requires payment transparency, a free market, and competition. Not just competition among insurance providers, but also competition among health care providers. HSA’s go a long way towards motivating consumers to shop wisely.

    • jyalai

      Price controls, which is what Obama is doing with healthcare, lead to long lines and poorer quality. It does not reduce cost.

      The only way to reduce cost is through innovation and gains in efficiency. If the federal government wanted to spend our hard earned tax dollars to affect the cost of medical care, the only method it has is to incentivize innovation and efficiency. This is usually done by reducing red tape.

      Everytime I hear a liberal screaming that the answer to reducing medical costs is a bloated, top heavy, costly, bureaucracy, I pull some of my hair out from the stupidity of it. That kind of thinking is what our bloated, top heavy, costly, public education system teaches.

  • ss396

    Yes, insuring people with pre-existing conditions is desirable. No, letting people wait until they have a condition before purchasing insurance is not a financially viable business plan. How to achieve the first without exposure to the second?

    At the companies where I’ve worked, the health care plans have always had an annual enrollment period. You don’t have to enroll, but if you don’t you are not allowed to enroll until the next year. No insurance coverage for the ensuing year; no exceptions. You are not charged for the health plan (and you therefore keep all that money), but you receive no insurance assistance if something does happen to you during the year.

    How many folks are willing to take that gamble? Some will, surely, particularly the indestructible youth. But most folks past their mid-20s, as they gain spouse & children, are going to buy-in. Others will figure it out on their own, that it’s a dangerous risk to be uninsured for a year. Most anyone who isn’t enrolled and has a serious medical incident will become a believer.

    Under a scenario of a narrow window of opportunity to enroll, you could not game the system; you could only gamble on it.

    • Menlo

      They have something like a mandate “nudge” in that those who do not buy insurance are not penalized until they seek services (presumably for which they cannot fully pay). At that point, they would owe back payments and penalties.

  • KC

    Let’s face it – one of the most popular provisions of Obamacare is that of dealing with pre-existing conditions.

    Like it or not, any Republican plan will have to address that sticky wicket to gain enough public support to obliterate Dem opposition.

    I believe there is a free-market solution to this without Government mandates.

    Read here to see my idea:

    http://www.redstate.com/simpleman/2011/01/17/repeal-and-replace-an-idea/

  • JoeG

    Those on the right are fooled because they believe the untruths the left is throwing out about “Pre-Existing Conditions”

    For Example:

    Pregnancy can never be considered a pre-existing condition.

    If you take a new job and enroll in the new plan within 63 days of leaving the old job, then you have “continuous credible coverage” so the insurance company can’t deny coverage of a condition.

    • 6eorge Jetson

      while moving his lips

      “At a time when our discourse has become so sharply polarized, at a time when we are far too eager to lay the blame for all that ails the world at the feet of those who think differently than we do,” Obama said, “it’s important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds.”

      Whatever is fashionable at the moment.