Thursday, December 2, 2010

The Pre-Existing Conundrum

One of Obamacare's supposed cornerstones is a provison preventing insurance companies from denying coverage for 'pre-existing conditions'.

In a nutshell, a pre-existing condition is something you are afflicted with/experiencing before you sign up with the insurance company. If you are signing up for private insurance (you pay for it) the insurance company will either adjust the premium you pay to take into consideration this condition, or they may deny you coverage completely. If you are receiving insurance through an employer, the insurance company will probably have something in the policy stating that they will not cover the condition under the policy.

If you are a person trying to get this insurance, pre-existing really sucks. You are either going to have to pay more for your insurance, look for another insurance company, or pay for that condition out of your pocket.

If you are an insurance company, pre-existing really sucks. You know up front what your likely costs are going to be to cover this person with a known condition. You have to make a business decision as to whether to charge more for the insurance, deny coverage for that person, or deny coverage for the condition. If you choose none of those, you know up front you are going to lose a bunch money.

Pre-existing conditions really suck. They are a fact of life. Rarely does your body, your health take into consideration what your insurance situation is.

Obamacare prevents insurance companies from taking any action due to pre-existing conditions. No fare increases. No denied coverage. Insurance companies MUST cover the condition, whether they have collected any premiums for the coverage or not. The private citizen/healthcare consumer in me loves this. I hate the word pre-existing condition in relation to insurance, because it invariably means it will cost me money. However, when I consider the broader implications, I am concerned.

Obama and his minions leave the discussion right there, because it sounds so good. They purposely avoid the difficult questions and situations their declaration brings up. This is by choice, because the American Public as a whole would recoil if they knew the ramifications.

As I've explained in earlier posts, insurance is a risk pool. A group of people pay into the pool (premiums). When a member of the group has a loss (or injury/illness), they can pull money from the pool to recover. A simple example - a village of 20 families creats an insurance pool. They each pay $5 into the pool. One family suffers a barn fire. They can pull money from the pool to rebuld the barn. The pool is depleted until additional premiums are colected form the families to replenish it. If the mayor manages the pool, he may charge a fee, that fee being taken out of the pool.

The village families are the insured. The family who lost their barn is the claimant. The mayor is the insurance company. The system works. The insurance companies make the profits they need to stay in business. The system is so large that many people just can't grasp the fundamentals.

Obamacare's pre-existing ban has a good effect when a person changes insurance companies (due to personal choice or job change). The ban prohibits the new insurance form declining to cover the condition that was previously covered by the other company. This is good for the consumer, but bad for the insurance company.

It is also good when someone who does not have insurance signs on with an insurance company, and that company must cover conditions the consumer already has. This is very good for the consumer, and very bad for the insurance company.

A 'loophole' is created by this last 'good deed'. Under the new law, someone who chooses to not spend any money on insurance can wait until they find out they have a condition/illness before signing up for insurance. the insurance companies cannot deny them coverage, or charge them extra. The insurance company has to shell out money to cover this person without ever having collected any premiums to pay for it.

This is not insurance. This is welfare. It is welfare dictated by the government, but provided by private insurance companies at their cost.

What healthcare consumer in their right mind would pay for health insurance if they are not in actual need of it right then, given the government has told them they don't have to? It would be stupid not to wait until you get sick to take out a policy.

Likewise, no insurance company in their right mind would offer health insurance under these conditions. There would be no money coming in in the form of premiums, just money going out for claims. No business can operate like that. Only the government can do that.

So, if you read the headline description of Obamacare's handling of pre-existing conditions, it sounds great. The detals (all 2400 pages of them) contained within the bill are the real defnition, the defnintion that Obama and the Democrats refuse to talk about.

The end game in this is simple. Obama is on record multiple times stating this is his goal. He wants a single payer healthcare system, where the government controls all healtchcare, and pays for all healthcare. There is no room for private insurance companies or private health insurance, or employer provided health insurance in Obama's model.

Obama's model is not new. Leftists/Socialists in this country have been trying to force it on us for decades. Each time it has been uncovered for what it was, and defeated. This time, they succeeded in fooling enough people to let them put it into place.

Here is Ronald Reagan speaking to theAmerican People back in 1962 about he dangers of Socialized Medicine. Darned near exactly what Obama has pushed onto us. Remember, if you take the time to listen to this, he was a registered Democrat at the time ...

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