Opponents of Obamacare have recently been in a vigorous debate over what, if anything, should be done to help people with pre-existing conditions when Obamacare is repealed. This debate was triggered when House GOP leaders signaled their intention to bring to the floor a bill that would have drained an open-ended Obamacare fund — now being used to finance and promote the law’s “exchanges” — and used a portion of the resulting savings to bolster high-risk pools for persons with expensive health conditions. ...
It’s important to understand the political context within which this issue is being debated. The entire Obamacare edifice rests on the deceptive assertion that the law’s primary purpose is to cover persons with pre-existing conditions. The president and his team never defend the vast majority of the law’s provisions. What they do claim is that Obamacare was necessary to protect Americans, especially the sick, from the unregulated abuses of the health insurance industry. That argument, misleading as it is, resonates to some degree with the public, which is why the administration keeps repeating it over and over again.
And why does it resonate? Because, while the problem of pre-existing conditions is far narrower than we are led to believe, it does exist. In an article I coauthored with my American Enterprise Institute colleague Tom Miller, we estimated the number of people who have a pre-existing condition and are unable to gain access to affordable coverage at about 2 to 4 million people, or perhaps 1 percent of the U.S. population. The administration would like voters to think that tens of millions of Americans are facing this problem, which is not true. Most Americans who have expensive chronic ailments or have experienced a significant illness or injury in the past are already enrolled in very good insurance plans, mostly sponsored by their employers. Moreover, federal law already allows them to move between job-based insurance plans without fear of getting charged higher premiums based on their health history.
But there are cracks in today’s system. The main problem is that health insurance is owned by the employers, not the workers. When an employee needs to leave job-based insurance for the individual insurance market — for any number of possible reasons — the insurers providing coverage in that market can, under most circumstances, charge higher premiums to their potential customers who have, or had, serious health problems, even persons who have been in continuous insurance coverage for a very long time. This accepted practice in the individual market strikes a lot of people as unfair....
- The way to ensure stable insurance for persons with pre-existing conditions in a reform plan that emphasizes markets, not government, is to create a new protection for people who stay continuously insured.
- They should be allowed to move seamlessly between job-based and individually-owned insurance products without fear of being risk-rated based on their health status.
- To prevent the market from destabilizing during the transition period, it will be necessary to subsidize the premiums for the very costliest cases. That can be done with properly funded high-risk pools....
- Some believe that the federal government should not involve itself in high-risk pool funding at all, ever. But the concept of “continuous coverage” protection for insurance enrollees will only work if it applies nationwide....
- Done right, the end result won’t be “Obamacare-lite” but a market-driven health system in which the federal government’s role is dramatically scaled back, not expanded.
