The New Pre-Existing Condition
posted at 1:31 pm on October 13, 2009 by CK MacLeod
[ Healthcare ]
If, post-Obamacare, insurers must insure regardless of pre-existing conditions (“guaranteed issue”)…
…and the penalty for not having insurance is less than an insurance premium…
…why would it be in any currently uninsured person’s interest to purchase health insurance – unless currently receiving treatment for some chronic condition, and in many cases even then?
Why wouldn’t it be in the interest of many currently insured people to drop their insurance?
Isn’t the underlying tendency of this kind of reform to build up a pool of the undergoing-treatment “insured” and not-yet-undergoing-treatment “uninsured”? Doesn’t guaranteed issue amount to “everyone’s always already insured,” while what we call insurance will instead turn into “treatment financing”?
And if we’re moving into a forced treatment financing system, won’t the tendency be to lose the economies of insurance (risk pooling advantages to buyer and provider)? Given the illimitable desire for ever more and better health care, doesn’t that necessarily require either 1) rationing or 2) the inflation of a new health care bubble – more and more resources poured into a health system in a losing race to stay ahead of the devaluation of those resources – or, 3), more likely, both?
If you think about it, this method of eliminating pre-existing condition exceptions turns being healthy into the new pre-existing condition – until and unless the penalties, under the mandate, approach the costs of health “insurance” premiums, and in effect become indistinguishable from them, and the total system becomes indistinguishable from tax-supported “health security”: socialized medicine.
Blowback
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CK, National Review is following you around. See point 1 of the first section of the article.
Howard Portnoy on October 13, 2009 at 1:49 PM
The calculation is not to compare the penalty with the insurance premium. The calculation is to compare the sum of the penalty plus any amounts you reasonably anticipate paying for health care (to the extent they would be covered by insurance) with the premium.
It’s not just a “chronic” condition that would cause someone to decide to pay the premium. Just getting tests in connection with an annual physical, plus the cost of an annual physical, could easily be $600.
Jimbo3 on October 13, 2009 at 1:55 PM
Jimbo3 on October 13, 2009 at 1:55 PM
$600 + $1000 (the smaller penalty under the moving target) is still a lot less than health insurance. Additionally, lots of people, especially self-employed/poor/without insurance/healthy don’t get annual physicals. Many haven’t seen a doctor in years, maybe since they were kids! Many who currently have insurance would do without annual physicals if it would save them thousands of dollars.
CK MacLeod on October 13, 2009 at 2:06 PM
substitute “middle class and lower” for “poor” in the above reply (since the poor are presumably covered by Medicaid and ER care, or don’t have much of an incentive to avoid bankruptcy if that’s what it takes to qualify). Also, the incentive to businesses currently on the fence about providing insurance, esp. “Cadillac” insurance, would skew as or more toward not providing it, not to mention against new hires.
CK MacLeod on October 13, 2009 at 2:18 PM
That’s an example, CK and that’s my wife’s bill (pre-insurance) for her checkup, before any follow-up. If you have three people in your family having checkups, or have a kid playing sports, or have to purchase any sort of on-going medication, the differential gets much less.
Jimbo3 on October 13, 2009 at 5:05 PM
It’s hard to call this a done deal yet. Crystal ball and all, maybe the asteroid will hit in November making all this a moot point.
What hasn’t gotten enough face time, and due to our MSM never will, is the array of other bills, measures, and amendments that would replace or make more fiscal sense of this floating turd. Of course doing away with the bill and any version of it is the best hope, but not likely to occur. But as everyone who accesses the Green Room, Hot Air, Zombie Contentions, Michelle Malkin, The Weekly Standard, and the other usual suspects knows, other, better ideas abound.
I for one can’t understand how a congress that can put an amendment protecting a class of citizens onto the bottom of a defense spending bill couldn’t manage to simply slip an amendment just after that saying “no US health insurance company can deny coverage based upon pre-existing conditions under penalty of death”. How hard is that. Pre-existing problem solved.
There are a number of primary issues that this bill is attempting to resolve and each could get a similar treatment without
rewritingviolating the Constitution and destabilizing, yea, destroying, the health care system in America.Read a story online yesterday about a couple living in sewer drain in Vegas. Love it there, so they say. One day, one or both of them is going to be taken by ambulance to a trauma center when that sewer floods. SOOOOO, are they gonna get a ticket for not having insurance? Make up your own scenario, there’s a million of them. Or 47,000,000 if you like ’cause that number isn’t going to change, by mandate nor any other way.
Robert17 on October 13, 2009 at 5:43 PM
Jimbo3 on October 13, 2009 at 5:05 PM
As a single self-employed man I can’t tell you how much I’m looking forward to paying to narrow your differential, Jimbo3.
A lot of people struggling to make ends meet in this economy will be even less likely – by the cost of 1 fine – to seek medical care for incidental problems, much less check-ups.
CK MacLeod on October 13, 2009 at 6:14 PM
CK-
The already existing 8.4 million (estimated) 18-25 yr olds who choose to not have insurance make you argument for you. It Vegas odds when you’re young. Right now about 1/3 of that age group (by US census data) chooses to play the odds, if the house is covering your hand if you lose why not play the game?
batterup on October 13, 2009 at 7:00 PM
I lot of couples over 50, no kids at home, are paying over $15,000 a year to insure the two of them. If they are healthy, they would be smart to bank the $15,000, which would easily pay for checkups and a blood pressure or statin drug. If something comes up, then they could jump into the insurance market. My premiums are already high enough, if this “reform” increases them, and there is no pre-existing condition problem, then for the first time in 52 years, I will be un-insured. I can “self-insure” for the little things.
bopbottle on October 14, 2009 at 10:33 AM
thanks, bopbottle and batterup: Looks like we’ve got both ends against the middle, with Jimbo3′s premiums rising faster and getting him less.
And I thought Cash for Clunkers was the very model of modern liberalism.
And we haven’t even begun to discuss the economic and budgetary fantasies basic to the plan, even in the unlikely event that other assumptions are somehow borne out.
CK MacLeod on October 14, 2009 at 12:30 PM
You are either being funny or you are much more intuitive that you realize, do you know who originated the Cash for Clunkers shamboozle?
Alan S. Binder Oh look there he is! He is one of the founders of National Academy of Social Insurance. Tell me you knew that ahead of time.
NASI – Jacob Hacker is a VP, and oh look Liz Fowler, the author of the Baucus bill, she’s a member, so is Andy Stern, and so is Roger Hickey. Hmmm how is it those folks keep ending up in a room together? They support the government take-over but their language is mild, and says things like using it to supplant workman’s comp.
Karl was doing some work & had two green room pieces on the behind the scenes dealings – Cash for Senators- if you will – I hope one of you Green Room guys can do some digging on NASI.
batterup on October 14, 2009 at 10:00 PM
batterup on October 14, 2009 at 10:00 PM
Sounds like a job for Glenn Beck, but, until he gets the word, I guess it’s up for part-timers like us.
(No, I didn’t know – and I kind of wish I didn’t – but thanks for the tip anyway.)
CK MacLeod on October 14, 2009 at 10:19 PM