Health-care reform: Why not ban pre-existing condition exclusions and call it a day?

In all but a handful of states, if you have a pre-existing medical condition, you’re going to have a hard time buying individual insurance. You might get turned down completely, or be charged very high premiums and probably also have to wait as long as a year (paying those very high premiums the whole time) before the health plan covers your condition’s treatment.

So it’s no surprise that one of the most popular components of the Congressional health-reform bills is the part that says insurance companies would have to accept all comers regardless of pre-existing conditions. So popular, in fact, that some politicians and pundits have suggested that we should just ban pre-existing condition exclusions and forget about the rest of the legislation.

Would that work?

Probably not, say insurance experts we consulted.

"Think about it from the insurer’s perspective," said Thomas Buchmueller, professor of risk management and insurance at the University of Michigan. "If somebody says you have to cover everybody from day one, well, that creates an incentive for consumers to wait until they’re sick or pregnant to buy insurance. That’s like buying homeowner’s insurance after your house burns down.  The plan has to collect enough money to pay everyone’s health care bills, and if they are all sick, you have to collect a lot of money."

The logical solution, then, is another component of the reform legislation—the individual mandate that says everyone has to have health insurance or pay a fine.  That way, the risk pool includes healthy people whose premiums can subsidize the care of the sick. It’s the underlying premise of all types of insurance: spreading the cost of big-ticket catastrophes across a large pool of people.

But there’s a problem with that when it comes to health care. In the U.S., we spend more than $7,000 a year on health care for every man, woman, and child. "Even if you had every person in America in the risk pool, a family of four would have to pay $28,000 for health care," said Karen Pollitz, an insurance expert at the Georgetown University Health Policy Institute. "That’s why you’ll never expand coverage without subsidies."

You can see where all this is headed. Banning pre-existing conditions won’t work without making sure the risk pool includes healthy people, and you can’t do that without helping lower-income families afford the premiums. And before you know it, you’ve ended up with the health-care bills now stalled in Congress.

—Nancy Metcalf, Senior Program Editor

Comments

[mrgwashere]

After approximately 10 years with the same company, my sister was laid off late last fall. Unable to afford the COBRA costs, she was surviving on unemployment. Since she was 62, her future employment prospects, especially in the current market, were bleak at best.
Knowing her unemployment benefits were finite, she was feeling pressured to tap into early social security thus losing more than 25% of those benefits for life.
I was in the process of arranging to move her here with my husband and I about 140 miles away. When she and I last spoke, she told me that she was not feeling well and admitted that this had been the case for quite some time. She admitted that she couldn't see a doctor because she couldn't afford it without health coverage. I pushed her to make an appointment and told her that we would pay. She said she would. This was a couple of weeks ago.
For about a week and a half, we noted that she was not answering her phone nor responding to email. Since one of our family members usually spoke with her several times a week, we became concerned. My daughter, finally called the police in my sister's town and asked them to check on her. This was last Wednesday, February 17. We received a call from the police later that day notifying us that she was found dead in her apartment.
The grief and pain of her loss is matched only by my anger that she is merely a statistic in a long list of American healthcare horror stories.

[Patty Zevallos]

Healthcare reform can start now with no high price tag

Obama and Congress are taking the entirely wrong approach to healthcare reform. We can be doing so much right now to improve healthcare without suspicious price tags. There is nothing wrong with carrying out reform in two phases: the immediate and low price-tag phase, and the longer-term, let's-find-the-money-first phase.

What can be done now, with little public opposition:

One group plan
Everyone would have access to insurance if all insurance companies were required to offer a plan to individuals as though they were all in one large company group plan, with the same rate and no exclusions. There is no cost to taxpayers; premiums are paid by the insured.

Guaranteed coverage and insurance market reforms
Few would argue with such provisions. The health insurance industry has been such a Wild West that companies could promise anything and provide nothing. They suffered no bad consequences when they blatantly breached contracts with subscribers. Other than enforcement, there would be no cost to taxpayers.

Essential benefits
An independent committee would define an "essential benefit package" as a minimum quality standard. It would include preventive services with no co-pays or deductibles, mental health services, and oral health and vision for children. It would cap the amount that consumers have to spend per year, and cost taxpayers nothing. Insurance companies could add features to this basic package. Now they can get away with not paying for basic services because most people do not have a choice of plans, and insurance plans are far too complicated to easily compare.

Individual responsibility
It is time for the government to be honest about the lifestyle factors that cause many of our healthcare problems. According to an article at preventdisease.com that is based on research reported in The New England Journal of Medicine, "preventable illness makes up approximately 80% of the burden of illness and 90% of all healthcare costs," and "preventable illnesses account for eight of the nine leading categories of death." This is the single most important factor in lowering healthcare costs and making people healthier. But in most ways it is not a role for government. It is up to individuals to change their habits. However, the federal government certainly shouldn't be making the situation worse. That means telling the truth about the fast food and prepared food industries. And it means requiring that government agencies and contractors use part-time and telecommuting work arrangements so people have time to exercise and prepare food at home. A national campaign aimed at employers, encouraging them to use flexible schedules for workers, such as part-time and telecommuting, could do a lot of good, with the government itself taking the lead. Cost to taxpayers: nothing. In fact, there are potentially huge savings in lowered healthcare costs.

Pushing for results
It is time for ratings. Netflix movies are rated. EBay sellers are rated. This is established technology. It is time for a central web site that shows us ratings for healthcare providers. Some sites do this now, but there are too many with too few ratings and it is chaotic. An insurance company doing ratings of its providers is not an unbiased source. How good is that doctor / hospital / radiology lab anyhow? How effective? How organized? How long a wait? How polite? How accurate a bill? This costs little and offers so much in savings and making healthcare very effective quickly. No more money is wasted on ineffective providers. People get well much sooner. Providers change their methods to get better ratings. Cost to taxpayers: very little. Such a site would also reveal the really bad eggs . . . moving on to . . .

Making sure healthcare providers really do their job
States are supposed to enforce this now, but often don't. According to a press release from Public Citizen's Sidney Wolfe, MD, "Most state medical boards are doing a dangerously lax job in enforcing their state medical practice acts and adequately disciplining physicians." In another article, Dr. Wolfe said that from 1990 to 2002, just five percent of U.S. physicians caused 54 percent of the nation's malpractice lawsuit payments, basing his numbers on information from the National Practitioner Data Bank. A constant stream of reports show that hospitals are covering up mistakes. If states were doing their job, there would be little or no malpractice lawsuits. This is far more important than tort reform. With ratings, state regulators, properly funded and monitored, could spot and check on providers who are doing a poor job before they do something really really wrong. Such a practice would eliminate payments to incompetent providers and lower malpractice cost. Cost to taxpayers: very little.

Emphasizing primary care
Healthcare reform needs to enhance the partnership between patient and primary care doctor. The primary care doctor is the one who needs to be on top of what is happening with a patient, with whatever record-keeping system works best for him or her (usually a hybrid of paper and database. All-electronic record-keeping is not reliable yet). Primary care doctors need to be paid as much or more than specialists and be paid for phone call and record-keeping time instead of just doctor visit time. Many doctors are forced to use a more expensive visit when a phone call will do because they don't get paid for phone time. Cost to taxpayers: nothing

Looking close at hospitals
Hospitals need to be very closely audited. Not only are there often bogus charges on bills, but the charges are far far beyond costs. No one really checks this, so they keep doing it. Employees wander around hospitals that don't seem to be doing anything. Hospitals charge for unnecessary tests, with no one making sure that tests are based on research. Anyone who complains is ignored. Medical institutions are roach motels for our hard-earned dollars. Dollars check in but they don't check out. Cost to taxpayers: very little.

A simple little thing
Refrigerator magnets can save millions. Yes, you read that right. A magnet can list the phone numbers, hours, and locations of urgent care centers that can be used during weekends and evenings instead of much more expensive emergency rooms. We now waste millions on non-emergency problems being treated in emergency rooms simply because people don't know where else to go. Cost to taxpayers: very little.

Another simple little thing
Money is wasted on mailed Explanation of Benefits forms from insurance companies when this information could be provided for free via a secured web site. Cost to taxpayers: nothing.

These no- or low-cost changes would greatly improve care and save millions. They are the first step. There is no reason to delay them in order to get a “comprehensive” healthcare reform. No reform can possibly work without them in place first.

Patty Zevallos
media producer – web, video, print
www.pbzproductions.com

[Gabrielle]

Here's the problem with pre-existing conditions: once you get to around my age, 40, you have at least one. Whether it's a past concussion, vertigo, pneumonia, ear infection, etc, if you've lived a normal life, you've gotten sick at some point. As a result, you either have to a) lie to get coverage and cross your fingers that you won't get caught or b) do what me and my husband--both freelance workers--do: shell out a whopping $14K every year for an insurance policy that covers no medication, no testing, nothing so far as I can see, and has a huge deductible.

There has to be some kind of change or no one over 40 is going to be able to afford a private health insurance policy period.

[James Archer]

Good Morning

The whole issue has many a moral issues that can be to a large extent resolved and a much healthier society as a result.
I can see though why government and others are reluctant to get drawn into this area of thought.
But yes, by all means make it mandatory for all to be insurable wheather by state or private enterprise. That removes the non participant from the system mind you there must be some possible coverage of the fees when involuntary situations arise for those who have lost employment. Maybe employer or government support then takes over.
Second- Remove the pre existing conditions for insurability.
Third- Americans who willingly engage in risky behavior such as drugs, physical self abuse,abberant forms of sexual behavior, or engage in risk inducing extreme sports, games,and other activities to pay much higher premiums or in extreme cases a become non insurable person.
Fourth thought might also include a compulsary life insurance policy that could provide a sort of fund for a one time final solution for those who find it necessary to engage in risky or extreme activities.
My suggestion here presented does not reflect the best or even ideal solution but I firmly believe that people need to be held accountable for their behavior, activities and choices in life.
If a belief system is not filling that roll, which is clearly evident in North American society today, and if the present business community such as Insurance companies fail this roll, then government regulated solutions and intervention is necessary to protect the rest of society. There you have it, my view. All the best.

[IvanG]

Nothing should be a business. The all powerful, all encompassing state should provide everything. But what would be the incentive to work, produce and innovate?

[GrammaGeek]

"An insurance company is a BUSINESS, which ... " That is exactly why health should NOT be a Business!

[Dolev Reuven Gilmore]

An insurance company is a BUSINESS, which should have the right to decide what deals they make with their customers. Insurance is a pooled account to spread risk. Why should a company take on an assured loss? And don't forget, it's forcing much higher rates for everyone. By forcing insurance companies to take on preexisting illness, money is basically being stolen from one person to cover another.

[JVK]

You may be able to get around the preexisting problem by having an enrollment period. If somebody is going to wait to get insurance until they need it, they may think twice if they have to wait up to 12 months to enroll without any retro-activity if they get sick.