Is Pre-Existing Condition Possible Without Mandatory Coverage?
One of the main points on which most people seem to be in agreement regarding health care reform is the need to do something about people being denied coverage for pre-existing conditions.
Just from a humanitarian standpoint, I want to believe it is the right thing to do. The problem I am having is how do we accomplish this without driving up costs for everyone or, if we restrict premiums insurance companies can charge, driving the insurance companies out of business.
Obviously, it's the sick who cost the insurance companies money which is paid for by the reserves paid in by the healthy. If someone is able to buy insurance while on their way to the hospital for a sickness, then this individual has not paid into the reserves while he or she was healthy. But because insurance companies are required to provide coverage, this sick person will end up drawing down the reserves. So how will this reserve be replenished? By raising premiums on those who choose to maintain coverage while healthy.
Wouldn't the people who chose to maintain coverage while healthy begin to ask themselves "why should I carry insurance while I'm healthy when I can just buy it if I get sick?" I know I would be thinking long and hard about it.
And if more and more people decide to buy "just in time" coverage, I think it goes without saying insurance companies would cease to exist. It would be impossible for them to make money just covering the sick.
And if there's no private insurance companies, what are we left with? Which institution can operate without the need to turn a profit? The government of course! Then you've got to ask yourself, do you really want to turn your health care over to the government? Aside from the impact this will likely have on our taxes, I prefer to have some choices in where I choose to shop for my health coverage. If I am unhappy with one company, I want to be able to switch to another that I feel would provide me better care for myself and my family.
So how do we prevent people from just buying coverage only when the get sick? Only way I can see doing this is by mandating coverage for everyone. I agree that the government requiring us to carry health care coverage seems intrusive but if we want to ensure that those with pre-existing conditions are cared for, I can't see any other way around it.
And with such a mandate, I think there's the possibility of restricting premiums insurance companies can charge since a larger pool of people would be paying into the reserves. Most of us already carry some form of health care coverage so such a mandate wouldn't be forcing us to do something we aren't doing already. And, in fact, I believe it would help those who already have coverage by realistically driving down premiums.
There's obviously the issue of those who currently do not have coverage because they simply can't afford it. I think the only way to address this is by the government offering some form of tax credit to low income households.
The government will have to pay for such households through increasing revenues/taxes. But rather than taxing individuals, let's limit the corporate deductibility of health care offered to employees. Mandating coverage for everyone and restricting premiums will drive down the costs corporations will have to pay for the health plans offered to their employees. So even if corporations have to pay a higher tax, the savings from lower premiums should offset the tax expense where it doesn't affect their bottom line.
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