For example, an employer has three employees: a 45 year old man, a 46 year old woman and a 25 year old woman. All premium calculations are based solely upon the demographics, conditions and claims risks for those three people. Using a simple example, let's say that the claims risk for this group is $36,000. The premiums for each will be $1,000 per person per month to cover claims risk.
The second example is a large employer with 2,000 employees split among all sorts of demographics. The claims risk of that group is divided among all 2,000 employees and their dependents. Again using a simple example, say the claims risk for this group is $200,000. Divided by the number of employees, it works out to $8.30 per person per month for claims risk.
(claims risk) ÷ (# of employees) = premiums
Simple mathematics dictates that the larger the number in the denominator (number of covered employees) compared to the claims risk (numerator), the smaller the premiums (result of the calculation.)
Keep in mind that claims risk assumes that the premiums cover all claims within a month as well as creates a pool of money that will increase over time to cover additional claims. The claims risk calculations dictated by various government entities is extremely complex with precious little variation permitted. I'm using a gross simplification for ease of communication.
Additionally, Federal law prohibits selling group coverage to any entity other than employers. A group of individuals in a non-employment group, such as a club or business-related group, cannot purchase health insurance. Similarly, it is against the law for health insurance companies to create a group for individual policyholders to increase the denominator in the premium calculation. Presumably this law originated in the 1950s as a reaction to mob use of insurance for money laundering, and if coverage were limited to employers the government had a way to ensure that only legitimate groups were receiving insurance coverage.
When an employer hires someone with a preexisting condition and is forced to cover that condition under the existing health coverage, the calculation is skewed. While the claims risk goes up substantially (the numerator), the number of covered increases only by one (the denominator.) Hence, all the employees' premiums go up to cover that one person. The new employee has contributed nothing to the money pool built by other employees' premiums over time but will immediately begin consuming that pool of money. For many conditions, e.g. AIDS, cancer, etc., the new employee will never contribute enough to the money pool to cover the care the employee will receive.
It boils down to one new employee demanding that all the other employees pay for the new employee's care outright.
This is why until 1996, employer groups were not required to cover preexisting conditions. No insurance company dared dictate such a scheme to its customers. The government mandated this coverage with HIPAA.
The moral question is should employees who have been contributing to an insurance pool while using minimal amounts of the pool for health care be compelled to pay in both increased premiums and a shrinking money pool for the new employee with a chronic preexisting health condition?
If we were asking the same question about any other financial transaction, the vast majority of answers would be a resounding "NO!" If a new bank account holder wanted to open an account using $5 out of all other account holders’ funds, the outrage would be immediate and deafening. Yet in this case the vast majority say, "Sure, why not?"
So what do you think? Is this moral or immoral? Why or why not?
Neither
amoral, it is simply a calculation of what the financing would cost, a risk/benefit analysis.
I see that we all have a preexisting condition in the eyes of the abortion industry because we are alive and did not die.
I buy a new car, and have an accident, either through my own fault, or by accident. I then take a taxi to a car insurance company and DEMAND that they sell me an insurance policy on my totaled car, effective retro-actively to the time before I had my accident.
After all, it’s so much cheaper for me to pay $200 now to the insurance company, than pay $25,000 to replace my car.
Doesn’t that about sum the whole situation up?
6 couples go to dinner once a month. Some order an appetizer, others order drinks, others order both, others order neither. The check is split, no separate checks.
Why preface the issue as a moral question? It is a business decision. Should automobile insurance allow you to buy a collision policy on your car that has a preexisting smashed fender, then expect the insurance to pay for repairing it?
Should people be allowed not buy health insurance until they are diagnosed with cancer, then be able to buy insurance to cover their chemo treatments?
Did you know that in most cases, preexisting condition exclusions only last for one year?
I have tried to figure out which pre-existing conditions they are lobbying to cover.
Pre-ex already cannot be excluded so long as there is not a significant break (63 days or longer) in coverage, per HIPPA. This whole pre-ex idea was one of the tauted benefits of HIPPA, in addition to the privacy components of the law.
How many women wanted to go out and buy health insurance the moment that the ept test came back positive.
I have a pre-existing condition (MS) and we are covered through group insurance from my husband’s employer. If medical payments for my pre-existing condition were denied, we’d be in the “poor house” because the cost of the med I take would break us, so I probably wouldn’t take it. However, if I don’t take the med, I’m taking the risk that the disease will progress more rapidly and cost more to treat.
It’s easy to talk of how to deal with pre-existing conditions as long as you’re winning the “health” lottery, but if you lose to cancer, or a neurological disease, etc. then the pre-existing illness problem becomes very real.
Truth...I paid into group insurance for 25 years and never had to use it. So for the past 10 years, I’ve had to use it. In that light I really don’t see anything wrong with the system. I paid for someone else’s care for years, someone else it now pitching in for mine. Wish I didn’t have to use the insurance to pay for meds, but at $2900 per month, I don’t see a way around it. Wish my friend with breast cancer didn’t have to get those $1400 shots to help her fight the effects of the chemo, but she does.
Nobody with a pre-existing disease wants it...it just happens. It’s easy to find all the faults with the system till you’re on the other side of the argument. Like the guy in the parking lot as he eyed the disabled parking places up close to the store...”Those handicapped people have all the luck!”
Yes, they should. We enjoy lower premiums because we DO subscribe to the effects of pooled ownership. If we enjoy the benefits, then - in for a penny, in for a pound - we can't just refuse the drawbacks. Such situations - a pre-existing illness - are largely arbitrary in who they afflict, so while you and I may think it unfair right now to help pay for coverage of a new employee with a PEC, down the road, you and I might find it equally unfair when we turn out to be that same employee getting denied coverage.
Plain and simple, in a pooled plan, you shouldn't get to cherry pick who gets coverage and who doesn't. If you can deny people with past conditions, it gives room to deny people with somewhat predictable future conditions (smoking, obesity). Companies are trying to do just that by charging those who smoke with penalties. And that slippery slope leads to genetic markers and requiring health exams prior to hire, and perhaps during employment.
Not to mention, those with pre-existing conditions who are switching jobs have probably already paid into the premium system and deserve that care anyway.
Perhaps there could be exception for very small firms, but very small firms don't offer fantastic healthcare plans anyway because their costs are higher in the first place.
If we were asking the same question about any other financial transaction, the vast majority of answers would be a resounding "NO!" If a new bank account holder wanted to open an account using $5 out of all other account holders’ funds, the outrage would be immediate and deafening. Yet in this case the vast majority say, "Sure, why not?"
But that's not how banks work, and we know that going in. Insurance plans are defined by the pooling of risk - and we're all at risk. If the object is to pay premiums until something happens and only end up denied when a change of life event occurs (now you're a PEC!), then there's no point in having insurance at all, and we're all idiots.
By setting up a one time round-robin enrollment list comprising all licensed insurance companies, those presently uninsured would be automatically enrolled on a round robin basis. The round-robin insures that the pre-existing risk is evenly distributed among insurers.
I will put it this way. Politicians cant shut up about the evil insurers denying coverage for pre-existing conditions, as if the only ones who benefit from that policy are fat-cat executives.
In my book, the people acting most immorally are those who wait to get insurance until they have a need for an expensive treatment, then take a policy for only as long as needed to extract coverage for the problem.
This has reportedly been happening in Massachusetts. Paying a small fine to be uninsured is a lot cheaper than joining a policy and staying.
The simple truth is that the insured CAN be victims of the uninsured and casually insured. But this is too difficult a concept for demagogues to master.
What is more troubling is that pre-existing conditions can even be genetic predispositions for which the individual has obviously no control. I fear that with the government collecting everyone’s medical records such information could be used to discriminate not only in providing coverage and treatment but even in hiring for jobs or approving loans.
I think there should at least be a rider that folks with pre-existing conditions can buy to get coverage for their conditions.
As to the questions of “Why should I pay for someones already broken leg” well why should a healthy person pay for another person in the groups bypass, even if they were insured at the time? It’s not the healthy persons fault the other guy did not take care of himself why should his premiums go up to take care of him?
Because that’s what Insurance is. It’s about sharing risks.
I think the biggest problem I have is Insurance Rescission. People who get their policy canceled because they dare get an illness. This is something that must be dealt with.
And if the Democrats were to propose a bill that got rid of insurance rescission except in the cases of outright fraud and failure to pay premiums and eliminate pre-existing condition clauses they could pass that bill in a landslide.
Most people aren’t against a lot of what’s in the bill. It’s the Federalization of Health care, especially decision making, and the single payer by installments “public option” that they are proposing.
If they stripped about 40% of the bill they could get the other 60% passed by very wide margins.
How about where a new employee is hired and only THEN acquires some expensive chronic ailment. Should employees who have been contributing to an insurance pool while using minimal amounts of the pool for health care be compelled to pay in both increased premiums and a shrinking money pool for the new employee with a brand new serious health condition?
Duh. That's what insurance is for.
Insurance is pooling of risk. If one has cancer, for instance, what is the risk of getting cancer? There is no probabilistic risk: one already has that decease.
Even simpler: what is the risk of SCHEDULED tooth cleaning? None: it is going to occur with probability 1.
And why stop at health? Suppose someone's roof caves in, and then the house owner seeks INSURANCE that would cover roof damage. This would not be insurance at all. If we cover preexisting conditions in health, why not in auto or home insurance? That would be stupid, wouldn't it?
It is equally stupid to require that of health insurance.
The big problem is that insurance companies use it as an excuse to not cover things. I’ve dealt with the hours of questions they come up with to try to find a way to say that the problem was there before you wound up under them. On the surface there are good reasons for the pre-existing condition exception, but in practice they use the fact that you bumped your knee on a table when you were six to not pay for your knee operation when your 40.
If they are black, they must be covered.
If they are not black, good luck to them.
Fabulous discussion—thanks!!!!!
Makes perfect sense....when I wreck my car I’ll give Allstate a hundred bucks and let them fix it.