Why are health insurance companies still denying people for pre-existing conditions

Right now pre-existing condition rules still apply for adults, but starting January 1st 2014 that is supposed to stop and they will have to take everyone.

Some people like myself have pre-existing conditions, but they are conditions that increase our risk of disease in later life (ie we have hypertension, obesity, poor blood lipids) rather than conditions that cost large amounts of money to treat right now.

Luckily with the affordable care act a federal system of pre-existing plans was developed. So if I move across state lines to find a new job I can still reapply for the PCIP plan. But that may get defunded soon.

But from an financial perspective, I do not think I will incur any major medical expenses between today and January 1st 2014, during that period I’d pay premiums but collect far less than I’d pay since I’d be looking at high deductible plans. So what motive is there to continue to deny people coverage based on pre-existing conditions that are cheap to treat, or that will cause problems long after insurers are forced to cover pre-existing conditions anyway? If insurers are going to be forced to carry people with pre-existing conditions in 2014 anyway, what does denying them for the next 3 years achieve unless people have expensive medical conditions during those 3 years?

Is the hope that when 2014 comes around people like me will pick a different carrier than the ones who rejected us?

Do they hope a political takeover in 2012 will result in allowing pre-existing condition bans to continue indefinitely, or that political leverage will remove that part of the bill (my understanding is insurers love the mandate to buy insurance, but hate the consumer protections. So I’m guessing they are pushing behind the scenes for that kind of system)?

Is the risk of expensive medical procedures over the next 33 months serious enough to drive them away?

I hate the US health care system, and have serious moral problems with giving my money to prop up this overpriced, immoral system. I think that is a bigger motive than many people realize as to the rates of uninsurance, people do not want to spend thousands of dollars supporting a corrupt system that will drop them once they need help if they don’t have to. I wish I could buy catastrophic coverage for a nation like Mexico and just go there if I get sick. But I’d still need my primary and emergency care done locally in the US. I’d rather get my medicines from Canada and my surgery in Costa Rica if possible. But if I ever did need expensive surgery traveling to a foreign nation can be hard.

I applied for health insurance for some of my kids last winter. I was told that the insurance company could not turn them down for pre-existing conditions, but that they could charge more for the premiums. The amount quoted was far more than I could afford, but still, they weren’t denied. So I don’t think companies are still denying folks.

IIRC the poster Desert Nomad left the U.S. for this very thing. He can be insured at a reasonable amount overseas but not here.

The motovation is money. You have to understand companies have to report to the stockholders. They care about MONEY.

For example if the Acme Insurance Company has a great year and shows a profit of 10 million dollars the first question asked is WHY didn’t we make MORE. And you had better come up with solid reasons why you didn’t make 10 million and 1 dollars, or the board and stockholders are upset, as that’s one more dollar that could’ve went into their pocket.

Now it sounds like greed, but you have to see it from the perspective of investors who ARE risking their money.

It’s call revenue management, it’s no longer about making money, you have to make THE MOST POSSSIBLE money you can.

If the insurance company treats ANYONE they could not have treated they have to make darn well sure the premium offset the cost. AND they also figure in things like, the time spent selling a policy to a person with a pre-existing conditon, could’ve better been spent selling a policy to someone who wouldn’t claim.

Anaylists get a paid to figure all these things out and THEY have to justified their own salary as well.

So it’s not a simple thing

Like Markxxx summed up extremely well, insurance companies are profit-driven.

In principle, sharing health risks between a larger number of people over a wider span of time will make it cheaper on an individual level when you do need that care. Most people, even relatively young and healthy ones, do not have the savings for the few times they get a broken bone or kidney stone, and those ER bills can quickly get catastrophically high.

In reality, denying risky people or procedures means bigger pocket linings. And that’s the bottom line. Few enough people will invoke their right to litigation that it is overall more cost-effective to deny as many people and procedures as possible while defending the few cases that litigate.

My own personal observation (disclaimer: this applies to workers compensation so it’s not exactly the same as health insurance, but it’s a mindset that applies to all insurance these days) is that many adjusters will deny or lowball payment for legitimate injuries and services, until and unless you get a lawyer. The reasoning is that it keeps their outbound costs low for all of the people who can’t afford or don’t want to get a lawyer, which of course is most of us. Yes, litigation can be skyfuckingly expensive, but all of the denials that HAVEN’T been litigated add up to more in the end than the few cases that did.

This is why health care funding, like safe roads and quality education, needs to be supplied by the government. But in the meantime, I would not recommend dropping your policy if you can afford it. Because no matter how high those premiums seem, IF YOU DO fall down the stairs and break a limb (which can happen to anyone at any age), you will have to pony up for the full bill or face bankruptcy.

I understand the economics of health insurance and how they have an incentive to deny coverage to those with pre-existing conditions. Our system is an immoral, corrupt, overpriced joke. Not denying any of that.

My point is that they will only be able to deny coverage for pre-existing conditions for 33 more months. After that they will be forced to accept all who apply.

So if a person with a pre-existing condition is unlikely to incur high medical costs over the next 33 months, what is the incentive to continue to deny coverage over that period?

If someone who is 25 with hypertension applies for health insurance in October 2013, is there any chance htey will have a medical emergency due to it before January 1st 2014? It seems unlikely. So I don’t understand the motives.

They might still be trying to figure out how much to charge for any given pre-existing condition, and will keep denying people until they have all their ducks in a row.
Just a random guess…

The US healthcare system is one of the main reasons I won’t move back there.

The insurance industry is still banking on – and amassing large amount of money and huge numbers of lobbyists to fight for – the full repeal of the healthcare bill. They aren’t going to follow any portion of the law a single day sooner than they legally must, and even then they’re doing it begrudgingly, even though the legislation was such a freaking gift to them (soon to have millions more customers!) the should be singing its praises to the highest heavens.