Health Care: Pre-existing Conditions

Now that the convention is over and Mitt is the anointed Republican candidate, his story is starting to shift in an attempt to appeal to the masses.  While the rhetoric before the convention was REPEAL OBAMACARE,  now he is saying that parts of the law are good and should be kept.  One of the parts that he likes is not allowing insurance companies to deny coverage based on pre-existing conditions.

First, by admitting that insurance companies should be compelled by law to insure a certain class of people is an admission that the free market economy will NOT  deliver the best result for the people in all cases.  It is not in any insurance company's interest to insure someone known to be sick.

Second, given that insurance is to be provided, how is it to be paid for.  There are basically three scenarios.  1. You just add them to the pool of those already insured, in which case the cost of insurance goes up for everyone in order to cover the added expense of insuring people with known health issues. 2. You create "high risk pools" into which these people fall and for which insurance companies will provide coverage.  Unfortunately, insurance companies are "for-profit" entities and they must set the premiums at a level that, on average, will cover the expenses of the group of sick people plus administrative overhead  and profit.  To take a simple example, let's say the "high risk pool" consists of people with cancer, the treatment of which costs $50,000/year.  In order for the insurance company to survive, it must charge $50,000/year plus 15% for administration and profit.  Who can afford that.  3. You can spread the risk, and cost across all people  by insuring the healthy as well as the infirm.  This is how insurance works, the people who are fortunate enough to never need it are the ones who pay for the less fortunate.  This is exactly what the "individual mandate" in the affordable healthcare law is supposed to enable.

If you already have insurance and you really don't care if someone else does or not, I guess you're going to ignore this line of reasoning.  Just remember though: as we learned in 2008, most of us are one "economic downturn" away from being jobless or switching jobs.  When that happens, perhaps your current beloved insurance will no longer be available.  If you've got diabetes, you're screwed.

Of the 3 options above, the only one that seems reasonable is exactly what the Affordable Care Act is trying to do.  The biggest issue I have with it is that it keeps the "for-profit" insurance companies in the middle of the whole thing.  Get them out of the way and go for a Single Payer system and we'll be on our way to a modern, affordable health care system.