Fix Pre Existing Condition

President Obama proposes to fix the problem of health insurance companies not providing coverage to people with pre existing conditions by forcing insurance companies to cover these people.  Of course, this means that premiums increase for everyone else.  Someone has to pay.

This problem and solution exemplifies the rickety, Rube Goldberg device existing government involvement has made out of the medical and health insurance industries. Rather than continuing to make the device more complex, expensive and prone to collapse, why not fix the root cause of this problem?

What’s the root cause of this problem?

The tax advantage companies have in purchasing health insurance plans over individuals.  Without this tax advantage, the health insurance industry would look more like the auto and home insurance industries.  We’d buy policies directly from insurers instead of being covered by employers and stay with those companies much longer.

In the last fifteen years, I’ve changed my health insurance provider ten times, twice due to changing employment and the other times due to my company changing providers or me switching from one plan to another within the company.  Luckily I haven’t had a pre existing condition to worry about.

I use the same auto and home insurance company I used fifteen years ago, same agent too.  My choice to stay with this company has been wholly independent of my employer.

I wouldn’t need to worry about pre existing conditions much if I were able to stay with the same health insurance for that long.


6 thoughts on “Fix Pre Existing Condition

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  3. I’m definitely NOT a supporter of government healthcare in any way, but I believe you have you facts in error. I don’t believe you ever would have had concerns regarding a preexisting condition. I too have made many insurance changes in the last 10 years from employee, to self-employed, and back to employee again. One of the key documents needed when changing insurance is the “certificate of creditable coverage”. This is the document used to verify that you had medical coverage between dates x and y. The law before Obamacare was that, so long as you didn’t have a lapse in coverage of more than a few months, then the next insurance company could not deny you coverage for preexisting conditions.

    • Thanks for the comment. I’m editing from what I initially replied.

      The ‘certificate of credible coverage’ derives from the 1996 Federal HIPAA legislation. This is a good example of government begetting more government, i.e. government trying to fix the problems it created previously.

      Pre-existing conditions from job and insurance plan changes were a problem caused by the marrying of employment and health insurance from the tax advantaged status health insurance received as an employee benefit. I know people who had this issue and still had concerns about it after this legislation passed as they had to deal with exclusion periods (where their specific pre-existing condition was not covered for a certain time period), ensuring all the paperwork was in order, that the insurance company hadn’t made mistakes and that the interim bridge plans they used qualified for certificates of credible coverage — which also happened to be rather expensive.

      Even with HIPAA, the amount of unnecessary churn the health insurance/employment coupling adds to the market increases the chances that someone will lapse or make a mistake. As I mentioned in the post, in my case there had been 10 changes of health insurance (now 11) to zero changes in home and auto insurance companies.

      It seems like eliminating the tax advantage employers get from health insurance would be a simpler solution than continuing to bolt-on more legislation, that as Richard Epstein put in the video I posted recently, “backfires.”

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