Insuring Pre-Existing Conditions (Yo No Soy Marinero, Soy Capitan!)

barnhardt.biz ^ | 17 October 2012 | Ann Barnhardt

[plsjr]

1. First, a FANTASTIC piece from Market-Ticker.org wherein KD speaks the truth in no uncertain terms about insurance and this total, complete bee-ess about forcing insurance companies to sell policies to people with pre-existing conditions. This is just sublime:

If you have a "pre-existing" condition then you're not buying insurance.

Remember what insurance actually is: A small payment made to someone in order to obtain pooled risk against an unlikely but catastrophic event that one either cannot or chooses not to reserve against on one's own.

By its very nature insurance is a negative-sum game. That is, if you take all the bad outcomes that happen across the insured population and sum their costs, the cost of the insurance purchased by that population must exceed the sum of the costs. It cannot be otherwise or the insurance company will cease to exist as it will make continual losses and eventually run out of capital.

As such if the catastrophic event already happened you're not negotiating for "insurance"; you are now trying to lay off the cost of mitigating the damage that has already occurred on someone else ex-post-facto.

The common word for that attempted act is theft.

[plsjr]

I had yet to give much thought to the issue other than an initial "that doesn't feel right" reaction. I love it when the light shines so clearly that any reasonable person can see and understand.

Her second and third items are info about her economic presentation and inclusion of the 'La Bamba' video (hence the post's title).

[goat granny]

When you get to be my age, if you don’t have a handful of pre-existing conditions, your already dead.

[blueplum]

but what about the people who paid for insurance, got a ‘condition,’ then got laid off, couldn’t afford cobra or cobra runs out, and can’t get insurance because their ‘condition’ is now pre-existing?

wasn’t their risk of getting a ‘condition’ calculated into their prior group’s premium? or any group for that matter?

with the average person changing jobs about 6 times in a career, that’s 6 times they face losing insurance because of a ‘condition’ they acquired along the way - most ‘conditions’ being a process of ageing.

[fr_freak]

but what about the people who paid for insurance, got a ‘condition,’ then got laid off, couldn’t afford cobra or cobra runs out, and can’t get insurance because their ‘condition’ is now pre-existing?

This is the way I read your post:

"I understand how being forced to accept pre-existing conditions destroys the entire insurance industry, but what about when it affects ME? What then?"

[blueplum]

the entire insurance industry has already factored in the occurrance of ‘conditions’ - including the average age those conditions may occur in a fluid and everchanging policyholder base. This risk is calculated by armies of actuaries. The only way the insurance company/industry loses is if the number of policyholders falls substantially, or there is a stagnant, aging, group with no younger members joining the group - not likely in an ever-increasing population.

[Marie]

The person has a valid point. The *average* person changes jobs at least 6 times. That’s 6 times that they risk losing their continuous coverage. Thus, losing their insurance for a pre-existing condition.

Most people will acquire disease at some point in their lives that requires modern medicine to mediate.

I agree with the OP that we’re not talking about insurance anymore. The basic concept is flawed.

We’re talking about how to deal with chronically sick people. People who, with medical support, are well enough to work and not sick enough to qualify for disability. The ‘walking sick’ as it were.

And what do we do with sick kids? With people who did nothing wrong but who still had to fight cancer, live with diabetes, autoimmune diseases, anemia, birth defects, etc?

Again, I’m not talking about those who are 100% disabled. I’m talking about those who’re well enough to work.

Let’s say we have a diabetic child who’s parents are poor. The child has CHIP until they’re 18. Then they’re thrown off health insurance. Get a job? What job? Without college this kid will be flipping burgers of forced into manual labor that their body will not be able to handle for long.

If they go for the manual labor job, it takes months (up to a year) of full-time work for insurance to kick in. They’re broke. How do they pay for health insurance to keep ‘continuous coverage’ throughout that time?

This kid desperately needs college more than most so they can get the good job with benefits and survive on their own. But they can’t survive the four years of college without medical care.

We are at a devastating point where science has developed well enough to keep people alive who, throughout all of human history, would’ve been dead. But science hasn’t developed to the point where it can actually ‘cure’ most of these diseases. Diagnose, treat, manage... yes. But not fix.

As a result, we have more ‘walking sick’ than ever before.

And we have no idea how to handle it.

The liberal’s idea is to put the unfortunate ones down. It’s cheaper that way.

Conservatives want to support and promote all life, but offer no suggestions on how to deal with this very real problem.

[skr]

That’s why insurance should never have been an employer-based item. And why health-savings plans should be allowed.

[fr_freak]

If I understand the meaning of your post correctly, you are advocating what is effectively a pyramid scheme. You are saying that an insurance carrier can absorb, well enough, customers with pre-existing conditions so long as they also acquire new customers, in sufficient amounts, who are young and healthy who pay enough in premiums to cover the costs. As with all pyramid schemes, this is doomed to failure, especially as generations fluctuate in terms of numbers. No company which operated on this philosophy would ever survive, so once they all went bankrupt, NOBODY would have insurance.

As they currently operate, insurance companies take on the lowest risk clients they can (or take on higher risk clients, but make them pay higher premiums) in order to *gasp* ensure that they make some money in order to survive. A SINGLE client, who undergoes a catastrophic illness or injury, which then requires a payout far exceeding the sum total of ALL the premiums that person paid in his time as a client, would require an amount of money equal to the amount of premiums paid by hundreds, if not thousands, of clients over a period of years. The actuary tables are figured in order to assess risk and provide a reasonable security that the insurance company will have the money to pay such claims, and still survive. They assess RISK. It is a GAMBLE, but it is a gamble that they MUST win, or else ALL insured clients lose when the company goes bankrupt. That is why they seem so harsh.

Forcing these companies to accept a KNOWN FAILURE - A KNOWN LOSS, which is to say, a person with a KNOWN catastrophic, or even lesser, illness or injury, is to take away the gamble and insert a CERTAIN FAILURE, but demand that they accept that certain failure. Well, if they can;'t mitigate failure, then they MUST increase revenue, which means either higher premiums for all of the other clients,or a higher number of relatively risk-free clients, of which there is a finite supply. In either case, you guarantee wither failure of the insurance carrier, and thus no insurance for ANYBODY.

[fr_freak]

You are making the same mistake that so many left-wing people make, which is to say that you are insisting that the harshness and unfairness of life in this world be evened out. Well, it can't be. The truth is that some people just draw the short straw. That is reality. We, as human beings, can work ourselves to the bone trying to assist those who were born with birth defects, genetic illnesses, or whatever, and save those who suffered tragic illnesses, injuries, or other horrors, but we can't change their fate. Looking to a system that was not designed and CANNOT be designed, to right all of the wrongs that befall mankind will only result in destroying that system, and then those who can benefit from that system will be left flailing, while those who cannot benefit from the system will STILL not be helped.

I'll give you a somewhat metaphorical example: some aspects of the Americans with Disabilities Act require that all public buildings (which is to say, all buildings, even if privately-owned, that allow public access) MUST have access ramps of a certain height and a certain width and, perhaps, elevators of a certain design when the building is multiple-story, etc etc etc. This was all put into place by well-meaning people who, at least ostensibly, sought to make life better for the disabled. However, the cost of these requirements, which benefit .00000001% of the population, incur a sizeable penalty on the rest of the country when they try to do business, in some cases ruining businesses through the legal liability, without doing ONE SINGLE THING to change the fact that some people are stuck in a freakin' wheelchair, or that they have trouble getting around. So, we present a HUGE financial and legal burden on an entire population in a misguided attempt to alleviate the misfortune of a minority of people who were born with or suffered defects, thereby ensuring a spreading of misery to all without alleviating ONE BIT of misery to those disabled people. They STILL have to use wheelchairs. They STILL can't walk, or climb, or run, or dance, and none of the thousands of government regulations will change that, but now we've placed a burden on the rest of the population in order to say that we're "doing something".

In the same way, you wish to see healthy people suffer because other people suffered misfortune. If they could pay more to ensure that the less fortunate would survive and be happy and normal, maybe it would be worth it, but the truth is that forcing insurers to KNOWINGLY take on the costs for already-sick people would relegate those companies to nothing more than forced charities, soon to be bankrupt and unable to provide any payment for ANYONE, pre-existing condition or not. Thus, NOBODY is covered, and the sick people are still sick.

[nurees]

Let’s also define a “pre-existing” condition. I was forced into COBRA when I could not purchase a policy when laid off - due to a “pre-existing” condition. I take zero medicine, get annual physicals but because I get a CT Scan once per year to monitor the size of a benign liver tumor that I was likely born with that has zero chance of malignancy - ever - I was turned down. Don’t drink, don’t smoke, no crazy family history. Nothing. And because I could not get insurance for myself, I was unable to get a policy for my minor child because an insured adult was not on the policy. I appealed and lost. All because of a question on the application that asked if I EVER had a conversation with my doctor regarding a liver or heart disorder. That is right - a CONVERSATION - not treatment. Even my gastro and primary doctors were ticked and this is with having a statement of coverage from my insurance company.

Fix the current system and use some common sense.

[Alberta's Child]

The only way the insurance company/industry loses is if the number of policyholders falls substantially, or there is a stagnant, aging, group with no younger members joining the group - not likely in an ever-increasing population.

You hit the nail right on the head. That is exactly what the U.S. is facing right now.

This is why the mandatory insurance provisions were included in ObamaCare, as well as the provision allowing unemployed adults to remain on their parents' insurance plans up to the age of 26. ObamaCare didn't include these things to address the rare circumstance where one of these young people gets an injury or illness that would bankrupt them. It included them because the primary purpose of ObamaCare is to prop up insurance companies by giving them a whole new cohort of compulsory customers who will be paying premiums while having minimal claims.

[Alberta's Child]

Exactly. Completely severing the relationship between medical insurance from employment would be one of the most effective measures to “fix” so many problems in our health care system.

[Marie]

And you just made the liberal argument for aborting defective babies and death panels. You’re also reinforcing the liberal argument that conservatives only want the rich to live. Only those who can afford to be sick can live.

We can’t afford it, so let them die.

As I said, we’ve entered a strange time in medical development. People who would’ve died at the age of 60 of a heart attack and never touched Social Security or Medicare can now survive another 25 years with medical care. Babies who would’ve died shortly after birth are living complete lifespans. My own son would’ve died ten years ago from diabetes. With medication and a possible kidney transplant in his future, he could live as long as anyone else.

We are not in such desperate straights that we have to kill off the weak.

You’re right. Health INSURANCE isn’t the answer. But letting grandma go because she’s too expensive isn’t the answer either.

[fr_freak]

And you just made the liberal argument for aborting defective babies and death panels.

I made absolutely NO such argument, and there is a bit of intellectual dishonesty here for you to suggest I did. The concept of forced abortions or death panels is a result of a single-payer type of system, which is what Obamacare wants to be, and what you seem to be advocating. The current system has insurance companies, which have a finite level of money, using actuarial tables and selective clientele in order to be able to direct those finite funds to help their clients. If you force such a company to take on clients who are a greater health risk, or who are a GUARANTEED health payout, you are forcing that company to spend all of their money, or even money they don't have, on those guaranteed payouts, which results in little or no money to pay for those people who were healthy when they signed up but experienced an unexpected event. That means that those who paid in when they were healthy get screwed because the money goes to those who were forced into the system with known problems.

If you signed on with an insurance company when you were healthy, or signed on with an existing condition that the insurer accepted but made you pay higher premiums for, then that risk vs payout is built in, and the insurer will survive.

If you take away the ability of the insurer to live within their means by assessing risk BEFORE signing clients, then their only alternative is to deny care to certain patients in order to save the money for those who do get care. That is your death panel right there.

It's like this: we've got 100 people on a boat that is sinking. There are two lifeboats, each of which can only hold 45 people. If you put 46 people in the lifeboat, it will capsize. That means that out of our 100 people, 10 are going into the water. You are focusing on the 10 people who need a lifeboat, while I am focusing on the 90 people we can save. We have a choice: either 10 people drown, or everyone drowns. Your way will drown everyone, while mine would only drown 10. What we have to accept is that we can't save everyone, because certain acts of God are simply beyond our power to fight.

All you have to do is look at what's happening to single-payer systems like the UK. In trying to guarantee healthcare for everyone, they are collapsing their entire system and MORE people are dying than would have died if they had left it to private enterprise. They are capsizing the boats. Forcing private insurers to take on people with pre-existing conditions will also capsize the boat. We simply have to accept that there is NO SYSTEM that will save everyone. Period.