Pre-Existing Condititons & Political Deception


  • What if a bunch of politicians tried to make themselves look more generous and compassionate than the rest of us by passing a law to provide medical services to a few folks that urgently needed them but didn’t have the means to pay?
  • What if those politicians contrived a way to force most of us to pay for those services, but outside the tax system?
  • What if those politicians didn’t disclose to us that we were generously providing needed medical services, but instead told us the extra money we paid was being funneled into excessive corporate profits and unmerited CEO salaries?
  • What if they then claimed the patients were being denied the medical services we were paying for?
  • What if they then insisted the only way to take care of those folks was to vastly increase government’s power over our lives?

Outrageous?  You bet.  But sadly, this is reality in America

It seems that almost everyone in Congress, regardless of party now agrees that health insurance companies should be required to cover people with pre-existing conditions.   In the industry this is called “guaranteed issue.”

What those Congressmen and Senators forget to mention is that to a large extent guaranteed issue is already a reality.  A 1996 federal law, the Health Insurance Portability and Accountability Act (HIPAA), requires guaranteed issue for employee groups, and prohibits charging extra premiums for employees who have pre-existing conditions.  Several states also require insurance companies to comply with guaranteed issue for individual policies. 

The recent rapid rise in the cost of health insurance coincides with implementation of guaranteed issue requirements.

When a health insurance company is required to insure someone who is already sick, it collects one monthly premium and then immediately pays out thousands, or tens of thousands of dollars for medical services.  This is like insuring a house that’s already burning.  The only way the company can remain solvent is to raise premiums for all its customers.

Thus, guaranteed issue explains much of the increase in premiums in the past decade.

Politicians like Barack Obama want credit for taking care of sick people who can’t afford medical care, but they don’t want to be blamed for raising taxes to cover the cost. They told us “greed and profits” were the reason insurance companies didn’t want to cover people with pre-existing conditions.

Then they passed laws requiring guaranteed issue for most of the population.

Then, when insurance premiums inevitably increased for all of us they again blamed insurance company “greed and profits.”

An additional consequence of guaranteed issue is the incentive for people to delay paying for insurance until they get sick, because they can plunk down the first month’s premium to become “covered.”  Again, to remain solvent insurance companies must raise premiums even more, which drives even more healthy  customers out, which results in even more premium increases.

Eventually companies will have to stop selling health insurance.

Recently we’ve seen the political-media establishment’s attitude toward the uninsured evolve from sympathy and compassion to judgment and resentment.   The 2,000 page bill passed by the House of Representatives includes fines and even prison time for deadbeats who don’t buy health insurance.  This change in attitude is grudging acknowledgment of the unintended consequences of guaranteed issue.

  • An honest politician would openly admit there’s no free lunch, and requiring the insurance company to accept someone who is already sick isn’t about purging greed.
  • An honest politician would admit guaranteed issue is simply a political scheme to transfer the cost of the sick person’s medical care to the rest of the company’s customers.
  • An honest politician would admit guaranteed issue makes the insurance company the de facto tax collector for a de facto social program created by Congress.
  • An honest politician would admit that guaranteed issue laws have caused the continuous premium increases, and the rising number of uninsured.

An genuine leader would admit that politicians cannot meet every human need with clever legislation, that never results in negative consequences.

But those admissions would diminish Mr. Obama’s messiah-like image, and transfer The People’s anger from insurance companies to the politicians who passed guaranteed issue laws, took credit for generously helping people who were sick, then lied about the cost.

A real leader would encourage Americans, the most generous and innovative people in human history, to voluntarily help, and develop financial mechanisms to help those who could not qualify for insurance.  If the insurance industry were not so heavily regulated it could be more innovative.Donate_Jan_Home

There are plenty of examples of high quality health care being provided at little or no charge to patients.  One is the Shriners Hospitals for Children.  They accept children who need horrendously expensive treatments at no charge.  Here’s a quote from their website

Children up to the age of 18 with orthopedic conditions, burns, spinal cord injuries and cleft lip and palate are eligible for admission and receive all care in a family-centered environment at no financial obligation to patients or families.

Liberty does work.  There’s no reason we The People can’t take care of our own without the imposition of command-and-control governmental systems that try to hide the costs and consequences.

1 Comment so far

  1. thousand flowers blooming on November 13th, 2009

    Typical conservative feeling sorry for insurance corporations instead of people.

    Insurance corporations have been screwing America and Obama is finally going to hold them accountable. Competition is exactly what they need and what they haven’t had.