Free Markets, Pre-Existing Illness, and You

I like to pretend to know what I’m talking aboot (I’m a blogger, it’s what I do), but there is a lot aboot health care reform I don’t really understand. I know what I don’t like (Obamacare) and know what I do like (a more free-market incremental reform), however there a number issues that I don’t get to focus my attention on as much as I would like as I reconcile bank deposits (that’s my day gig). One of them has to do with pre-existing conditions.

Surprising as this may sound, I don’t think people should be discriminated against for pre-existing conditions. By that same token, if those pre-existing conditions were preventable and/or self inflicted, someone who takes care of their health shouldn’t be penalized with higher premiums or a lesser standard of care because of those who don’t.

So where do we go from here? The Wall Street Journal had a few ideas…

A truly effective insurance policy would combine coverage for this year’s expenses with the right to buy insurance in the future at a set price. Today, employer-based group coverage provides the former but, crucially, not the latter. A “guaranteed renewable” individual insurance contract is the simplest way to deliver both. Once you sign up, you can keep insurance for life, and your premiums do not rise if you get sicker. Term life insurance, for example, is fully guaranteed renewable. Individual health insurance is mostly so. And insurers are getting more creative. UnitedHealth now lets you buy the right to future insurance—insurance against developing a pre-existing condition.

These market solutions can be refined. Insurance policies could separate current insurance and the right to buy future insurance. Then, if you are temporarily covered by an employer, you could keep the pre-existing-condition protection. Some insurers avoid their guaranteed-renewable obligations by assigning people to pools and raising rates as healthy people leave the pools. Health insurers, like life insurers, could write contracts that treat all of their customers equally.

The right to future insurance could be transferrable to another company, for example, if you move. You could have the right that your company will pay a lump sum, so that a new insurer will take you, with no change in your premiums. Better, this sum could be occasionally placed in a custodial account. If you got sick but had something like a health-savings account to pay high premiums, you could always get new insurance. Insurers would then compete for sick people too.

Innovations like these would catch on quickly in a vibrant, deregulated individual insurance market.

Read the whole article where things are explained better, since it was written by an economics professor and I’m just a blogger writing this while rocking out to “Stairway to Heaven.” And I supposed you can throw this on the growing pile of conservative alternatives the President Obama is…I guess since you are no longer allowed to insinuate that he’s lying, let’s just say he’s willfully ignoring that they exist.

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