The present health care bill is caught up in Congress in an argument over insuring pre-existing conditions. That’s a requirement Americans seem to desire, but that few understand, as Josh Blackman wrote in 2009:
. A September 2009 Kaiser survey found that 80% of respondents supported this ban [on failing to cover pre-existing conditions] ”“ that included 88% of Democrats and 67% of Republicans. Among those supporters, however, only 56% still favored the provision if it resulted in higher premiums; 36% would oppose it. Supporters almost certainly did not realize that requiring insurers to cover sick people would necessarily shift the cost onto everyone else.
Recent surveys are similar in that they uncover, not just the opinions of respondents on the question of coverage of pre-existing conditions, but ignorance about how the entire health insurance system works. Way too many people seem to think that insurance companies set prices and rules arbitrarily and that their reluctance to cover pre-existing conditions has no economic cause (except greed) and no economic results (except joy).
Now, granted, part of the reason for this ignorance is that “health insurance” isn’t really insurance in the usual sense of the word. But because it can be, and sometimes is, a matter of life and death to have it or not to have it, and because in most of the Western world it has become thought of as a right to be guaranteed by the government, a great many people not only no longer understand the way the insurance model would work for health care coverage, but they no longer accept that model even if they do understand.
Health care has become remarkably expensive, and specialized care is now priced out of the reach of most people. That’s not a coincidence; it’s partly a result of insurance reimbursement rather than out-of-pocket payments, and partly a result of laws requiring hospitals to treat even the indigent. But it’s also a reflection of the fact that health care equipment and treatment has become far more elaborate. Think just about a disease such as leukemia, which when I was a child was an invariable death sentence with no treatment at all, and then reflect on what can be done for it now.
The current debate on pre-existing conditions lumps together a host of different but related things. For example, we have the fiction that before Obamacare, health insurance companies regularly used to “drop” people who had been properly insured and then got sick. This was propaganda in the sense that it didn’t happen in the way that people were led to believe it did. There were laws to forbid it, and when you heard anecdotal instances of its happening anyway it was virtually always because the insurance company alleged that the patient had committed insurance fraud by not disclosing the pre-existing condition at the outset. In other word, the patient lied.
Now, sometimes the insurance company would use this as a ploy when it wasn’t true. In those cases people could sue, because the law was supposed to protect them from this. I am pretty sure that, as with most things, sometimes there was a miscarriage of justice. But there were laws that prevented this supposedly-widespread dropping of sick people just because they got sick.
Then there were the high-risk pools that used to cover people with pre-existing conditions prior to Obamacare. I’ve written about the subject several times before, for example here:
If you look at the chart in the middle of this page you’ll see that 35 states ran high-risk pools prior to Obamacare, and most had been in operation for many many years (Kansas had started its high-risk pool in 1993). The 15 states that didn’t have them didn’t necessarily leave their high-risk individual health insurance customers in the lurch, either. Some were guaranteed issue states, which meant pre-existing conditions could not be excluded at all: New Jersey, New York, Maine, Massachusetts, and Vermont had straight guaranteed issue, with Ohio, Oregon, Rhode Island, and Idaho having guaranteed issue with some restrictions involving previous continuous coverage…
How do I know this sort of thing? I was in a high-risk pool for quite a few years. It was far from perfect””I paid about the same as I would have if I hadn’t had a pre-existing condition, and my deductibles were significantly higher””but I could certainly get insurance.
It was a problematic situation, to be sure. But the idea that there was no recourse for people with pre-existing conditions who were not insured through their jobs is simply wrong.
There’s a lot more that is poorly understood about the way pre-existing condition coverage used to work, but I’ll stop there. I’ll just add that the confusion about what went on then—and the purposeful propaganda to make it sound even worse than it was (see this, for example)—continues in today’s confusion about what’s happening now:
[An amendment to the bill offered by Rep. Fred Upton, Republican holdout from Michigan] would provide $8 billion over five years to reduce premiums and other costs for those with pre-existing conditions who have a gap in coverage and reside in states that received waivers from some of Obamacare’s requirements under another provision in the bill…
Upton on Tuesday cited the bill’s provision on pre-existing conditions as a reason for his defection. Under the bill — prior to the amendment he is now working on — states could allow insurers to charge higher premiums for people with pre-existing conditions who have had a gap in coverage of at least 63 days in the prior year. States could also let insurers charge older customers more than the original bill allowed — at least five times more than younger ones, beginning in 2018.
“I told the leadership I cannot support the bill with this provision in it,” Upton said Tuesday. “It’s not going to get my ”˜yes’ vote the way it is.”
The previous GOP bill reflected something like the situation that existed prior to Obamacare: states making decisions, and some variability in the price of health coverage depending on whether a person has a pre-existing condition or not. That’s standard insurance practice, and it lowers the costs for others. But Americans have come to be dissatistifed with both that practice and with the high costs of health care and health care insurance, without acknowledging that they are asking for contradictory things.
The Bloomberg article I just linked also gives a statistic commonly offered:
About 27 percent of adults have a pre-existing condition like cancer or heart disease that insurers refused to cover before Obamacare, said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation.
“There are millions with pre-existing conditions,” he said.
That makes it sound like this would affect 27 percent of people. Of course it would not. Many many of these people are on Medicare, which does not exclude them. Many others are covered at work. This problem only affects the rather small individual insurance market. And of course, under the more Draconian Republican bill, they would be covered, just not as easily or as cheaply as those without pre-existing conditions.