Pre-Existing Conditions

The first vote to repeal ObamaCare is under way.  There’s no chance it will succeed – it can’t possibly emerge from Congress clad in veto-proof supermajority armor, and President Obama waits outside to cut it down with his veto pen. 

It’s still important to take the vote.  The debate will be edifying, and produce the kind of sound bites that finish off Democrats in tough races two years from now.  If the Job-Killing Health Care Repeal Oh God Why Did You Do This To Us You Didn’t Even Read The Bill You Dipsticks Act reaches the President’s desk, his veto will make an absurd lie of his loud, but flimsy, claim to judge regulations by their impact on jobs.  Those who have been paying attention since 2008 already know he didn’t mean that, but it never hurts to remind those who aren’t paying attention just how intensely he doesn’t mean it.

The conditions for a successful repeal effort don’t exist yet, but they might not have to wait until 2013, either.  Today six more states joined a Florida lawsuit against ObamaCare, and there has already been a judgment against it in Virginia.  That means more than half the country is trying to strangle this monster in the courts, even as its tentacles tighten around our throats.  If the Supreme Court doesn’t intervene to save its miserable life, either a veto-proof majority, or perhaps even the President himself, might start talking about starting over with a clean slate, and keeping past triumphs while learning from mistakes.

Meanwhile, the Republicans have settled down from their “Benny Hill” stage of chasing each other around Washington with alternative proposals, and begun putting together some individual health care reform bills.  One of the ideas they seem eager to keep from ObamaCare is preventing insurance companies from discriminating against pre-existing conditions.

Obviously there is great public sympathy for the tragic plight of someone who can’t get health insurance because they have a serious medical condition… but in what sense are we talking about “insurance,” if companies are forced to cover someone they know will cost them more than they can collect in premiums?  That’s welfare, not insurance.

Insurance is a business enterprise based on calculated risk.  All customers pay a relatively low premium, but only a few require expensive payouts.  It’s a reasonable and valuable purchase for the customers, because they’re buying protection against catastrophe.  It’s a calculated risk for them, too.  Look at any insurance plan which offers multiple levels of coverage at different prices, and you will find customers distributed between all of the levels.  You’ll never find a case where everyone buys the best plan, or everyone buys the cheapest.  That’s because consumers do the same thing as insurance providers: measure risk against expense and choose the plan which feels best for them.

Health insurance is relatively inexpensive (certainly compared to the health care it pays for) because a relatively healthy client base allows companies to make profits with low premiums.  Are those premiums still inflated?  Maybe.  The best way to find out is to let insurance companies compete with each other, to find the lowest possible price point – something virtually every aspect of our old health care system prevented them from doing, and that goes double for ObamaCare.

Withdrawing coverage from people who develop a serious ailment after they’ve already paid for insurance is an entirely separate issue, although it’s often lumped together with the concept of pricing or withholding insurance based on pre-existing conditions.  An insurance company which tries to weasel out of its obligations to a customer who paid in good faith while healthy is violating its end of a contractual obligation.

Requiring “insurance” companies to convert hundreds of dollars in premiums from patients with pre-existing conditions, into thousands of dollars of inevitable treatments, is tantamount to forcing them to sustain a welfare system for medical care.  Perhaps we should have such a system.  In fact, I suspect the compassionate American public would insist on it… but that doesn’t mean we should obscure its true cost by forcing the insurance industry to fund it, and recoup the cost with increased premiums for everyone else.  One of the reasons we find ourselves trapped beneath an unsustainable mountain of wanton spending is that nobody knows what anything really costs, or when it gets paid for.

Insurance can only be cheap if the industry is allowed to sell risk.  If you force it to sell expensive care at discounted prices, it will no longer be cheap.  Inexpensive insurance, coupled with an entirely separate system for helping people with serious conditions, is a far more logical way to manage health care costs for the majority of Americans than a system which requires them to buy expensive “insurance” that isn’t really insurance.