No, some pre-existing conditions are issues that have already been cured, and some may represent potential illnesses that may never happen. I have a heart condition which is being treated and monitored fairly cheaply. If I get a heart attack due to it, it would be expensive, but there is a very good chance I never would. I suspect I would not be insurable with a non-group plan, and if I stopped taking my medicine, the chance of me having an expensive attack would increase. Of course the health industry might get lucky and I could just die immediately.
Most group insurance from companies is mandatory, in that you must enroll and pay for it like it or not, unless you can prove that you are covered under someone elses insurance. Now a worker is probably healthier than average, but his or her children or partner might not be. There is no pre-existing condition exclusion, of course. Now, big companies are self-insured, so the insurance companies administering the program are not really at risk, but this strategy clearly works.
The problem with not having a mandate is not pre-existing condition per se, it is that younger, healthier people can game the system by staying outside of it, and saving money, when they are relatively healthy, and joining it the moment something happens that puts them at risk, or when they get old enough to start getting more out of the system than they put in.
I’m not sure how accurate this turned out to be, but the justification for the big increases Blue Cross requested in California was that high premiums was driving all but the sickest people out of the system, thus leaving more expensive customers, which caused a premium increase, and so on. It certainly is plausible. If you paid $100 a year for healthcare, being young and healthy, why buy insurance costing $2,000 a year?
Really? I used to get the health insurance quotes for my company and it was never stated that everyone had to join. There was usually a minimum requirement imposed by the HI company that something like 70% of the eligible employees must join. But certainly not all employees.
Every place I’ve worked has had levels of coverage, high medium and low, but there was a minimum you had to pick no matter what. Like I said, all have been self-insured, so this is a company, not insurance company, rule.
Not that I would opt out, but health insurance is by far the biggest chunk of the flex benefits amount we get.
Precisely. Perhaps companies selling to smaller firms need to allow opt out, since the employer may not want to cover everyone. But since the bigger employers have the power to force everyone to participate, it is clearly cost effective for them to do so.
A pre-existing condition that actuaries would assess as cured or extremely unlikely to reoccur are non-issues. Again, I can assure you with great confidence that insurance companies welcome every profitable dollar they can get their avaricious little mitts on. If they turn you away, it’s because their morbidity tables tell them they can’t make enough money on you.
Seriously, does this even make sense? It seems to come up in every thread on the topic. “Oh, no, my pre-existing condition would have no adverse impact on profits. And yet insurance companies refuse to insure me!” I don’t think so, but maybe I’m missing something.
They deny due to a perceived risk, not because there necessarily is one. They may not have enough data to make an informed decision. The relative I posted about earlier has an unusual condition. As I wrote, there have been no complications due to it for 30 years after the initial problem, but I doubt anyone could calculate a believable probability of future problems for him. Easier to just deny coverage. Obviously if they new better they’d be happy to take the money, but they don’t and often can’t.
As you wrote, “insurance” may not be the most accurate term, because one of the other major benefits of having health coverage is the reduced prices of medical care when one has a health plan. I could have a plan with a $100,000 deductible. The likelihood of the insurance company ever needing to shell out money for this is low, but my medical care will be a hell of a lot cheaper than the care for someone without any insurance.
Edit:
There are also plenty of conditions where it’s highly unlikely that that individual will have no problems that adversely effect profit. However, (exaggerating a bit) if the 0.1% of the people who have the preexisting condition will each cause $100 million in losses, then the other 99.9% won’t get covered. I’m sure everyone understands that already though.
Guaranteed to not recur, sure. But in many cases pre-existing conditions are an indicator of something with a higher probability of occurring and thus more of a risk than someone without. Clearly, there is an optimal number of higher risk people you want to exclude to optimize profitability, and this will include those whose conditions do not recur. (And people with invisible problems that later pop up will cost money also.)
Since an insurance company cannot afford to give a full physical to anyone requesting coverage, to precisely detect problems, they are going to have to use grosser measures to determine the cutoff point.
The real problem is not the absolute profitability of insurance companies, but their relative profitability. Any company who is open to those with pre-existing conditions will have to raise their rates, and will lose those without them who will migrate to companies who don’t take these people and thus can charge lower rates. (Not an issue for company plans, since people are not free to move outside a limited set of options.) If companies are forced into taking people with pre-existing conditions, it won’t be a problem, since they should have roughly equivalent risk pools, and can set rates accordingly.
What’s the alternative? Pre-reform it was either making these people pay an arm and a leg, or going without insurance, which winds up costing the market anyway since they cannot be excluded from treatment. The government could set up a high risk pool, but no one would want to pay the taxes to support it. Spreading the risk evenly, by mandate, and then setting rates to ensure whatever level of profitability makes sense seems to be by far the best way to go.
The point of healthcare reform isn’t to take high-risk people out of the pool. It’s to make the pool bigger. It’s the Diner’s Dilemma: you go out to a restaurant with a group of people and decide to split the bill evenly - everyone pays the same amount. But the guy next to you orders lobster and wine while you order a salad and water. You’ve already agreed to split the cost, so what do you do to make sure you’re not personally subsidizing a huge portion of this asshole’s meal? Invite more people who aren’t going to order such an expensive dinner to spread the cost around. There will always be people who order lobster; but if you have to pay part of it (and everybody does eventually, no matter what they think), wouldn’t you rather that your costs be spread out?
Insurance companies do give physicals (and conduct blood tests, etc.). But regardless, you’re agreeing with me here, I think.
It’s seems like a boondoggle to me. If we want to cover a known condition, why shouldn’t taxes cover that? Who do you think will pay for the higher rates? Why are we forcing this issue into a structure that is not designed to care for it? Again, with regard to pre-existing conditions, a given person does not need insurance. That ship has sailed. He needs someone he can forward his bills to. He is already (from an actuary’s perspective) a losing proposition.
Sounds like you are advocating a single payer system - and I couldn’t agree more.
But you seem to be confusing pre-existing condition with current ailment. We’ve had testimony in similar threads from people refused coverage for problems they are not under care for. I suspect I’d be refused coverage - I’m not eager to test this - despite the fact that my current care is quite cheap, and well within my financial ability to pay.
The reason for the mandate is to keep people who choose not to pay for insurance when healthy from suddenly asking for it when sick - which is exactly the situation you are discussing. Now that is a problem, and I don’t see a way around it except the mandate - or letting them die without treatment. But I believe the more common case has been someone laid off, thrust upon the private system, and refused coverage for a pre-existing condition which does not amount to an actual current disease under treatment.
Wrong - a given person may very well need insurance for any possible thing that could happen that has absolutely no relationship to the preexisting condition. Why should someone with mild intermittent asthma be completely unable to get coverage for all sorts of things that have absolutely no relationship to asthma? Like cancer? Or being hit by a truck? That’s the fucked-up situation we have right now.
I have mild hypertension. Something easily treated with cheap drugs nowadays. I don’t know about healthcare costs, but my brother was an actuary and he showed me how much more likely I was to die of natural causes in the next twenty years than a person who did not have any conditions listed on the life insurance rating forms. And the things that are more likely to kill me are many and varied. A few are the obvious ones, heart attack, stroke, but then you have a whole range of seemingly unrelated ones. All the common cancers, pneumonia. About the only thing I did not seem to have an elevated risk of was accidental death. For a 39 year old with everything in the form checked off “No” the most single most likely cause of death was “Accident - Auto”. So you are only right in a very limited sense. Your insurer should be willing to cover you for getting hit by a truck. But once you check off one of the big risk factors, you are indicating a higher risk for a great many other issues.
Nope, I’m not. I’m just reacting to your “by far the best way to go” comment. which you contradict in this post.
What does “refused coverage for problems they are not under care for” mean? TheMightyAtlas nailed it. Health insurers do not arbitrarily turn away profitable dollars. If they don’t want your money it’s because you’re a losing proposition, according to their morbidity tables. Eva misses the point as well. If they reject because of a pre-existing condition, it’s because they’ve determined that overall you’ll cost too much, and that effect quite often manifests itself in seemingly unrelated care–“seemingly” being the key word. Seriously, if a health insurer can make money on you, they will.
I buy health insurance knowing that I will likely pay far more than I get out of it. I do in exchange for coverage in the event that I do have some catastrophic medical condition. That’s the nature of insurance, and I’m fine with that deal. I get peace of mind, and health insurers get a modest return.
Those with pre-existing conditions (those that are turned away, in any event) are in a different category. They will likely get far more than they pay in. It’s a great deal for them. For the insurers, not so much. I don’t know why this isn’t self-evident, or what motives people believe insurers have for some of the anecdotal situations described. Maybe the insurers are like certain Bond villains, evil just for the delight in being evil?
Why not make health insurance portable? Why can’t it operate like car insurance? Why can’t we eliminate the barriers that prevent this, rather than create a wholesale, possibly unconstitutional, expansion of government power? Why is the solution always to create huge government programs or mandates? We can’t afford this, all that jive “budget neutral” nonsense aside.
And yet all the other developed countries in the world can. How come?
I agree with a lot of what you say - this is not insurance, and insurers will lose a lot of money if forced to take on guaranteed money-losers. But my response is not then “so let’s leave it as is”, but “so let’s change things so that all people can get a reasonable level of health care, and health companies can still make a profit”.
Dunno. I know people keep pointing this out, as if it magically makes our situation analogous. I do know that this is going to be funded by things like a $4 or 5 billion reduction in Medicare, a fiction unsupported by prior commitments to do the same in the cause of funding some prior boondoggle. This particular legislation will cost a lot of money, and I have no reason to believe we’ll realize the offsets we’ve “committed” to. We routinely ignore these commitments, when the vote actually comes up.
I don’t see how this cluster@#$% can possibly work. Health insurers currently enjoy only a modest profit margin as it is. This bill is an abortion of twisted logic (read up on the medical loss ratio rule, for example), and I believe it will end up putting many insurers out of business, some voluntarily leaving, others going belly up.
Okay, I’ll admit I should have included political feasibility.
That are in the past - that are being monitored at best. My wife had retina issues. Today she goes to see her doctor once a year, no more than average at our age, so I don’t think you could say she is under care. I’m not sure if she would be refused coverage or not, but if she were it would be an example.
Where did I say it was arbitrary? I dabble in statistics and data mining, and I am quite sure their forecasts are accurate. I am also quite sure their profit estimates are accurate. We are not at the present fix because of stupidity, but because the market does not work in this situation.
You are underestimating the benefits of insurance. Do you have term life? If so, do you feel ripped off if you don’t die at the end of a year, and pay all that money for nothing? Of course not. There is some economics behind insurance benefits (we teach this in our behavioral economics course because it has application in adding hardware to computer systems to avoid problems in the field) and it involves the cost of a problem. If you have a 1% chance of spending a million dollars in medical costs, which would be paid for by insurance, you get benefit from that policy whether or not you get that ailment. You are correct that insurance companies act rationally, but insurance buyers do also.
Now, the question is why do people with pre-existing conditions need to get new insurance? Clearly. insurance company profitability cannot be the only factor, otherwise they could dump existing customers with pre-existing conditions after one round of treatment is covered. Were these people covered when employed, and then lost their jobs? Were they dropped? Or, did they choose to not get coverage until they got sick? The mandate covers this latter case, which is under the control of the customer, unlike the others.
And you never actually addressed the problem. What do you do with these people? A single payer system works by creating a single risk pool including everyone. Dumping them on the government doesn’t work because the statistically ignorant yahoos will start braying about how expensive the program is. Doing nothing drives people into bankruptcy and/or gives hospitals big and uncollectible bills they have to recover by raising prices. Given that a single payer system isn’t politically feasible at the moment, the best solution would seem to be to force the insurance companies to take them, fairly, and raise rates for everyone. This is fair because any one of us might have a pre-existing condition at any time, for reasons out of our control, so paying now gives us a benefit later.
If you don’t like it, how about a solution which doesn’t involve screwing people with problems they are not responsible for.
Not sure why you think I’m underestimating; once again, I believe you’re agreeing with me. I think it’s a fair deal all around, buyer included.
Sorry, I don’t have one, not one that solves all issues, nor do I believe this is one (health insurance portability is a huge start, though–why don’t we explore that?). I wish everyone was insured, and no one was strapped with a catastrophic illness they have no resources to deal with. Wishing that doesn’t mean it’s feasible. I flatly dismiss the notion that I need to either accept an unsustainable, fatally flawed, possibly unconstitutional solution, or come up with another option. I don’t know what solves this, but I don’t believe Obamacare does. How about our first option be, let’s not install an unsustainable process that will bankrupt insurers (at least some)? Let’s not make the health care problem worse, for a start?
Sorry, just noticed this, that should of course be $400 or 500 billion in Medicare cuts. $5 billion maybe covers the annual Medicare expense for tongue depressors. Anyway, what’s a couple of decimal places among friends? (Let me tell you young whippersnappers, I can remember a time when $5 billion was still considered a lot of money ::grumble, grumble:: ;))