Pre-Existing Conditions & Health Insurance

[cb7010]

I was reading an article this AM that related to the ongoing political health care debate in the US; and, in part, it mentioned how the new law deals with pre-existing conditions. This got me thinking...

To me, the concept of insurance is buying protection just in case something bad happens and the rates are derived by being in a risk adjusted pool of people all doing the same. But, isn't coming into an insurance pool with a pre-existing condition kind of like wrecking your car first and then calling State Farm to initiate a retroactive policy? In essence, going into an insurance pool with a pre-existing condition is not really insurance at all; but, simply asking others in the pool to chip in and pay for treatment of a known problem. Does my logic make any sense here?

Of course, my comments have nothing to do with overall health care and cost reforms that may make it easier and cheaper for everyone, including those with pre-existing conditions, to get care. Simply occured to me that the concept of injecting people with pre-diagnosed health issues into an insurance pool is really not aligned with concept of risk based insurance at all.

 

[MichaelB]

Preexisting conditions does not mean currently ill. It means a 40 year old that had cancer as a child, or someone with an unusually high white blood count, or someone with allergies or rheumatoid arthritis. It also means someone with AIDS or cancer. It is an effort to exclude as much risk as possible by insurers.

Like car insurance denying a policy to a 50 year old driver who had a speeding ticket when she was 18. Except car insurance companies don't do that.

Preexisting conditions applies to individuals. People who have access to insurance through group policies cannot be denied by law. So, two people with identical health conditions, one applies for insurance through a group plan at work and the other self employed applies for individual coverage. The first gets the coverage and the second is denied. Go figure.

Health insurance is not insurance. Homeowners and life insurance are – in the sense they aggregate and share risk. Health insurance intermediates – they come between consumers and providers, take cuts from all involved, and pay themselves based on how much they can extract. This is a conflict of interest and shows why it is so difficult to change and reform.

Lawmakers, opinion leaders and such that describe pre-existing conditions as buying homeowners insurance after the fire are either 1)deliberately misrepresenting or 2) poorly informed, either of which leads to the same end.

 

[donheff]

The problem you present of people with preexisting conditions waiting until care is needed before buying health insurance is why the current program has a mandate that everyone must have insurance (or at least some pressure to push in that direction). That is also why single payer "socialist" systems like Medicare and most European systems cover essentially everyone. Adverse selection is a real problem with any system that lets healthy people choose to opt out until they need care. Horrible injustices and financial disaster are a real problem with any system that leaves people largely on their own to deal with insurers who can pick and choose who they insure.

 

[cb7010]

MichaelB makes a good point that I didn't consider in my first post, that the term pre-existing condition doesn't inherently mean somebody who is currently ill. So, instead of speaking in absolutes, I guess the real issue is how an insurance pool assesses, or in our age of government regulation how the are allowed to assess, the risk of individual participants before admitting them to the pool. I think to get into an insurance pool, you should have to undergo a full physical and/or screening such that the insurer can accurately assess your risk to the pool. If you opt out of such a screen, they should just charge you more to cover the interests of the other participants.

Should a statistically high risk person, whether the result of pre-exisitng conditions, age, lifestyle, genetics, etc.., be in a pool with low risk people and all paying the same premiums I would guess the healthy people would think they were getting ripped off and the unhealthy would think this a great deal for them. You would think ultimately that a free market solution would equalize the premiums based on risk and determined by science and statistics.

And, to the points about how health insurance is not truly insurance these days. I guess I agree to a point. But, I don't blame it on the "greedy insurance" companies, as all corporations are in business to make profits and their motives and actions are entirely predictable; but, largely the overregulation that stunts competitive alternatives. I am also of the mind that any individual should be allowed to self insure, I.E. pay cash, if they so choose.

Another point, which will obviously influence which side of the argument anyone will be on is deciding whose responsibility it is to care for a person's health in the first place. I would argue it is that individual's personal responsibility and some would argue that it is society's or the government's.

In any case, good points and good discussion.

 

[DblDoc]

cb7010 here is another perspective.

Your, healthy, working and have health insurance. You get cancer. Your insurance covers your care but now you lose your job. COBRA will cover for awhile then you go out to get insurance again. No go. You have a pre-existing condition. You get sick. Good luck.

DD

 

[GregLee]

I would guess the healthy people would think they were getting ripped off and the unhealthy would think this a great deal for them.

I think you're reasoning in a circle. Think about why you chose the phrase "ripped off". Nothing is being stolen from healthy people in a legal sense, because the premiums they are being charged are in accordance with the law. So you must mean you think the law is unfair or unethical. But that seems to be what you are trying to argue. So it boils down to saying that the law disallowing use of pre-existing conditions is unfair because you (and presumably some others) think it is unfair. There is no real argument here.

 

[huusom]

Our healthcare system puts profit before people life. That's what business is all about. This is fundamental flaw of the system. Unless a universal basic healthcare system is in place, we'll continue to have run away costs and more people without access to affordable healthcare.

 

[audreyh1]

How about a preexisting condition being a benign cyst in a small toe bone that requires no surgery and should be left alone in an otherwise very healthy 40-year-old? Enough to deny individual heath insurance coverage.

There are a ton of obscure little health issues that can cause denial. If it's something a little odd or unusual even if from way in the past and no longer experienced, you'll probably be denied. I've heard of numerous benign little things that force people to either take a rider (and how open ended a rider seems) or go into a more expensive state risk pool so that they are completely covered for pre-existing conditions.

Don't assume that all the people in state "risk" pools are high risk. I suspect many of them are not but are there because that is the only path to retaining complete pre-existing condition coverage when transitioning from COBRA to an individual health policy.

Audrey

 

[REWahoo]

Don't assume that all the people in state "risk" pools are high risk. I suspect many of them are not but are there because that is the only path to retaining complete pre-existing condition coverage when transitioning from COBRA to an individual health policy.

You are accurately describing my DW's situation. The two issues which resulted in her ending up in the state high risk pool are things she's been told by multiple doctors will very likely never cause any future problems. Yet no one would issue her an individual health policy without excluding anything and everything relating to diseases of the organs involved - even if the disease was clearly unrelated to the past condition.

 

[wanaberetiree]

Preexisting conditions applies to individuals. People who have access to insurance through group policies cannot be denied by law. So, two people with identical health conditions, one applies for insurance through a group plan at work and the other self employed applies for individual coverage. The first gets the coverage and the second is denied. Go figure.

This particular example I personally consider as discrimination based on health.

And it in addition sounds odd when you realize that health insurance companies are for profit and they get the best piece of the pie by insuring younger and in general healthier part of overall population.

 

[ERD50]

Our healthcare system puts profit before people life. That's what business is all about. This is fundamental flaw of the system. Unless a universal basic healthcare system is in place, we'll continue to have run away costs and more people without access to affordable healthcare.

I'll agree with your first two sentences, but not the conclusion that it is a flaw that must result in high costs.

Buy any electronics in the past 30 years? I can assure you the large electronics companies are all greedy, profit-seeking monoliths. Yet, we get better and better products for less and less money. As flaws go, that's not a bad one, IMO.

-ERD50

 

[LARS]

I haven't taken the time to understand (if in fact anyone can) the new healthcare laws, BUT the one thing of which I am certain is worthwhile is to no longer allow insurance companies to deny coverage based upon pre-existing conditions.

It is absolutely absurd that an individual is not free to move to any of the fifty states in the US without worry as to whether or not they will qualify for health insurance. Moreover, the current system which only allows you to apply for insurance if you live in the state in question creates the perfect catch 22: won't move without access to reasonably priced health insurance and can't find out if you can get it until you move.

This is a consequence of state by state rather than national guidelines (laws) and is ridiculous.

 

[MichaelB]

Our healthcare system is comprised mostly of hard working and well intentioned people trying to help others. The system is distorted because it has been allowed to evolve without any broad policy guidance but state and federal gov’t have regulated pieces of it, driving some participants to behave abnormally and allowing some to exploit others to their advantage. Efforts to control the price and mandate service levels for some services, and then only for some individuals, has resulted in distortions that affect most of us.

Some people are afraid to change it for fear of breaking the parts that still work. Others exploit this to impede more systemic change. And some just don't care that others are unable to obtain reasonable health care regardless of their ability to pay.

And if that weren’t enough, we have unhealthy diets and lifestyle and look to our health care to treat the consequences.

 

[Silver]

Are health care services a product to be purchased? Or are there moral/ethical implications to the provision of health care?

Currently...in the USA....our health care system tries to perform as if it's both. Does anyone believe that's working for us?

 

[Alan]

And, to the points about how health insurance is not truly insurance these days. I guess I agree to a point. But, I don't blame it on the "greedy insurance" companies, as all corporations are in business to make profits and their motives and actions are entirely predictable; but, largely the overregulation that stunts competitive alternatives.

Insurance companies are not regulated by the Anti-Trust laws that cover most other Corporations. This means that they are allowed to discuss pricing and market areas.

Certainly in the company I worked for healthy people were not allowed to opt out of insurance. It was always the same price structure for everyone so the healthy subsidized the sick and prayed that the same system was in place whenever they got sick. (Healthy folks at work could choose lower premiums and higher deductibles.)

 

[Khan]

Being female is a pre-existing condition.

 

[MichaelB]

Being female is a pre-existing condition.

 

[travelover]

I'll agree with your first two sentences, but not the conclusion that it is a flaw that must result in high costs.

Buy any electronics in the past 30 years? I can assure you the large electronics companies are all greedy, profit-seeking monoliths. Yet, we get better and better products for less and less money. As flaws go, that's not a bad one, IMO.

-ERD50

So if you get cancer and are uninsured, buy a television set - they are affordable.

 

[cb7010]

Are health care services a product to be purchased? Or are there moral/ethical implications to the provision of health care?

Currently...in the USA....our health care system tries to perform as if it's both. Does anyone believe that's working for us?

This is a good observation and if we can ever decide which, we can probably come up with some solutions.

A couple questions come up after reading through some of the posts above:

1. Before we had health insurance and government regulation of it, and I think we've had insurance for about the last 70 years and went without out it for all the hundreds of years before that; how did care happen exactly? I am guessing private business contracts between patients and doctors.

2. If I get sick and cannot pay for the treatment, am I morally justified to demand that others pay my bill for me? Frankly, not getting in this situation is a great motivator to me to work hard and to save for my health care.

I just happen to generally lean toward the free market solution and believe that society, through private charity will take care of less fortunate citizens. And, that government regulation and programs always tend to lead to favoritism and inefficiency. We should give incentive in our health care system for people to be fit and healthy...i.e lower premiums for the healthy. Of course, I can see the merits of the single payer argument, but your basis has to be that universal coverage is a moral obligation.

 

[Khan]

This is a good observation and if we can ever decide which, we can probably come up with some solutions.

A couple questions come up after reading through some of the posts above:

1. Before we had health insurance and government regulation of it, and I think we've had insurance for about the last 70 years and went without out it for all the hundreds of years before that; how did care happen exactly? I am guessing private business contracts between patients and doctors.

2. If I get sick and cannot pay for the treatment, am I morally justified to demand that others pay my bill for me? Frankly, not getting in this situation is a great motivator to me to work hard and to save for my health care.

I just happen to generally lean toward the free market solution and believe that society, through private charity will take care of less fortunate citizens. And, that government regulation and programs always tend to lead to favoritism and inefficiency. We should give incentive in our health care system for people to be fit and healthy...i.e lower premiums for the healthy. Of course, I can see the merits of the single payer argument, but your basis has to be that universal coverage is a moral obligation.

So if you or a spouse or child gets cancer or is in a major motor vehicle accident and you can't afford the ~$100K you or they should just die and stop whining?

 

[Peter]

2. If I get sick and cannot pay for the treatment, am I morally justified to demand that others pay my bill for me? Frankly, not getting in this situation is a great motivator to me to work hard and to save for my health care.

For the vast majority of people, there is no amount of hard work and saving that will pay for, say, cancer treatment, which can very easily run into 7 figures.

Peter

 

[Martha]

cb, you are blaming people for being ill and I do not see a good reason for doing that. Personally, I find it reprehensible. You can give all the incentive in the world for people to not get bipolar, or not be autistic, or not get cancer, or not get type one diabetes. They still get these things and it is not their fault. And even if there is an element of bad choice which may result in health problems you have no idea what might have led to that bad choice.

Charities also exhibit favoritism and inefficiency. Charities have not filled the void.

 

[zinger1457]

"1. Before we had health insurance and government regulation of it, and I think we've had insurance for about the last 70 years and went without out it for all the hundreds of years before that; how did care happen exactly? I am guessing private business contracts between patients and doctors."

Those that could afford treatment got it, the others just died off. The life expectancy before 1900 was about 40 years old.

"2. If I get sick and cannot pay for the treatment, am I morally justified to demand that others pay my bill for me? Frankly, not getting in this situation is a great motivator to me to work hard and to save for my health care."

Wonder what bad choices all those young children with cancer made? How is our current health care system going to help those children that survive when they become adults? I do agree that more could and should be done with our health care system to encourage folks to live healthy lifestyles.

 

[GregLee]

... that government regulation and programs always tend to lead to favoritism and inefficiency.

So if you or a spouse or child gets cancer or is in a major motor vehicle accident and you can't afford the ~$100K you or they should just die and stop whining?

Evidently, since that avoids favoritism and inefficiency.

 

[M Paquette]

So if you or a spouse or child gets cancer or is in a major motor vehicle accident and you can't afford the ~$100K you or they should just die and stop whining?

Talk to Midas Mulligan and see if he'll advance you the gold to pay Dr. Hendricks. If not, you're probably a moocher or looter.

(I can tell EXACTLY what direction this one is coming from. I smell Randians... )