Imagine this scene for a moment:
Stan is riding down the street with his new-found friend Chris. They’re both passengers in a flatbed tow truck. Chris’ car is on the bed, Stan’s car on the hook behind the truck. You see, Stan plowed into Chris and his car because Stan wasn’t paying attention while driving. They pull into the parking lot of a State Farm office. Stan goes inside and meets Bill, one of the insurance agents.
Stan: I’d like to buy some car insurance. I have my car outside.
Bill: Great! Let’s go out and take a look at it!
Stan: Here’s my car. (the one with no front end)
Bill: ...Umm, you want us to insure this?
Stan: Yes. I need to get it fixed and on the road as soon as possible. And fix Chris’ car as well since I hit him. Does the insurance include a rental option while my car is in the shop?
Bill: I cannot insure this car. It’s already wrecked!
Stan: So it has pre-existing damage. So what? Are you going to sell me a policy or not?
Bill: No. Go away.
Bill: Go. Away. Now.
I’m sure you can see the absurdity in the above story and think Stan is an idiot for trying a stunt like this. Ballsy, but stupid.
So why do people expect they can get a health insurance policy after they get a Stage 2 Pancreatic Cancer diagnosis or some other serious and/or expensive-to-treat medical condition?
The business model of Insurance is all about a pool of shared risk. The "pool" is all of their policy holders. The cost of Bad Things is spread throughout the entire pool, on the assumption that not everyone will suffer a catastrophic (and expensive) life event. Insurance companies use actuarial tables as a basis on how much to charge for premiums.
Actuarial tables, for example, looks at 10,000 white males, 20 to 30-years-old and sees that as a group, (these are made up numbers) 3% will develop cancer, 5% will suffer a serious injury from a vehicle crash, 8% will suffer a dismemberment due to workplace accidents and so on.
Each of these events have an associated cost for them. The insurance agency will then use this information (chance of an event and the cost) to determine how much to charge (along with administrative costs and profits) for the premiums.
The insurance model breaks down when pre-existing conditions (PEC) enter the picture. This is because with PEC's there is no chance that the person might get a particular disease, they already have it.
Right now, a “simple and easy” cancer diagnosis runs into the hundreds of thousands of dollars to cure. Serious cases can cost way more than that. How can you reasonably ask an insurance company to take on something like that? It would be like you buying a $200,000 house for $200,000, knowing that it will take another $250,000 of materials and labor to repair it and make it worth $200,000 because it’s currently falling down from disrepair or some other major issue.
I am not a “heartless Republican” (I’m not even a Republican at all, but that’s beside the point), so I am flexible on this. If people are very up-in-arms over those people with PEC’s, we can talk about a healthcare entitlement program, run by the government. Let’s just not call it insurance, because at that point, it’s not.
Instead of forcing everyone under the same umbrella (“share the risk”) with those who have PEC’s, those who have insurance can pay the market price for insurance without worrying about the insurance company raising their rates astronomically because they have to take on the PEC “money pit” people. If you fall into the PEC category, then you will get your healthcare from the government.
Hey, the federal government is *only* $20,000,000,000,000 in debt right now anyway. What’s a few more trillion dollars to the rest of us and our children?
Do PEC’s suck? Unbelievably. I realize that. First-hand experience and all that. I emphasize with you. It isn’t fair that you have this condition. But is it fair that you are asking everybody else in your insurance pool to pay an extra $10 a month for your condition? If you didn’t have a PEC, would you voluntarily pay an extra $50 a month in insurance premiums to support those that do have PEC’s? I realize that we will eventually pay it, either through insurance premiums or taxes, however forcing insurance companies to shoulder the cost of those with PEC’s only forces the insurance companies to go out of business and put hundreds of people out of work because people with PEC’s broke the model.
Yeah, that’s the ticket! Let’s drive those E-V-I-L insurance companies out of business! Then we can go back to the old medical model of “cash, one payment, up-front.” Yeah, those were the good old days. If you couldn’t afford the doctors services, you died. (I’m being sarcastic here, for those who have no sense of humor.)
I am not in favor of anybody being refused healthcare. I am for us doing so in a fiscally reasonable manner, one that does not unnecessarily burden our fellow citizens and future generations.