pre-existing conditions


Covering Pre-Existing Conditions in a Market-Driven Health System

There has been considerable debate among conservative opponents of Obamacare over proposed federal legislation that would fund high-risk pools for people with expensive pre-existing health conditions. In a column at e21 I explain why and how the federal government should help protect people with pre-existing conditions by funding high-risk pools.

Some opponents of this legislation have in mind the possibility that the problem of pre-existing conditions can be resolved with deregulation and a more functioning marketplace for health insurance. And it is certainly true that the problem is caused — in part — by the favorable tax treatment granted to employer-paid insurance premiums. This encourages heavy reliance on job-based insurance that is not owned or controlled by the workers, and can’t be taken with them when they leave their jobs. The discontinuity in insurance coverage that therefore occurs in the United States compels a regulatory solution to ensure that workers who switch insurance do so without incurring significant financial risks. We would be far better off if the market for private health insurance had developed differently, with individuals purchasing and owning their coverage more, as they do with most other insurance products.

But there’s no sense in ignoring reality. Today, about 160 million Americans are enrolled in job-based insurance plans, and mainly they are satisfied with what they have. If Obamacare is repealed, there’s little prospect of wholesale change to this insurance system. Therefore, opponents of Obamacare need to promote solutions for pre-existing conditions that presume the continuation of job-based insurance as the dominant form of coverage.

You can read the rest of the column here.

posted by James C. Capretta | 12:31 pm
Tags: pre-existing conditions
File As: Health Care

Debating Pre-Existing Conditions

I have a column today at National Review Online about how Romney's health care plan will help people with pre-existing conditions find insurance.

Under current law, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) ensures that workers can easily move from one employer plan to another without fear that their new coverage will exclude a pre-existing condition or that their new plan will increase premiums based on their elevated health risks. However, HIPAA does not provide solid protection for people who move from employer coverage to an individually owned insurance plan. In theory, HIPAA required states to set up options for those people with continuous insurance coverage and a pre-existing condition who want to move into the individual market from group insurance. In practice, those options do not prohibit insurers from charging much higher premiums based on the elevated risks of the enrollees; and, in any event, the law requires people who might enroll in such plans to first exhaust their COBRA rights with their previous employer plan. (COBRA is a program through which former employees pay premiums into their former employer’s health plan for up to 18 months after being separated from the firm.) The upshot is that HIPAA’s protections simply do not work in the individual-insurance market, and that is a big, not a small, problem.

Romney’s plan would fix this and extend to the entire health system, including the individual market, the HIPAA protections that work well today in the group market. This would allow millions of people to move seamlessly from group to individual coverage, and back again, so long as they stay continuously insured. That alone will dramatically reduce gaps in coverage that are so frequent today.

You can read the rest of the column here.

posted by James C. Capretta | 10:36 am
Tags: pre-existing conditions, 2012 election
File As: Health Care

Curing the Pre-Existing Conditions of Obamacare

Tom Miller and I have a column in AEI’s The American on why Obamacare is the wrong way to cover pre-existing conditions.

The starting point for addressing the problem of pre-existing conditions is a proper perspective on its size. The claim that tens of millions of Americans are at risk of losing coverage defies common sense. ObamaCare included $5 billion in new funding to subsidize insurance for the millions who were supposedly sick and without options. Far from the alleged 65 million people,only 77,877 had signed up for the subsidized Pre-Existing Condition Insurance Plan by June 30 of this year. The truth is that most Americans with health problems are protected by rules passed years ago by Congress and state legislatures that prohibit discrimination against them in job-based insurance. Not surprisingly, those employer plans pay for hundreds of billions of dollars of claims each year—from workers with “pre-existing” health conditions.

But don’t get us wrong. The problem of gaps in coverage for pre-existing conditions is real and needs to be addressed. It affects several million Americans, and that’s far too many.

The fundamental cause of gaps in coverage is a lack of portable health insurance, not the likelihood that almost everyone will eventually suffer from some spells of poor health. Health problems are an inevitable pre-existing condition of life, especially as we live longer. Lack of access to health insurance, however, is largely due to two particular public policies that unfairly penalize individuals and families seeking coverage on their own, rather than through their employer’s group coverage.

You can read the rest of the column here.

posted by James C. Capretta | 11:28 am
Tags: Obamacare, pre-existing conditions
File As: Health Care

How to Cover Pre-existing Conditions

The new issue of National Affairs, the excellent journal edited by my EPPC colleague Yuval Levin, includes a piece that I wrote with Tom Miller of the American Enterprise Institute. The focus of the piece is the problem of pre-existing conditions:

The health-care legislation enacted this spring followed more than a year of heated, rancorous debate. But rather than subdue the public's passions, the bill's passage has only stoked them. Opposition to the new law remains very high, and Republicans have made clear their intention to push for its repeal if they gain control of Congress and the White House in 2010 and 2012.

For their part, President Obama and other champions of the legislation insist that public attitudes will soon change. More Americans will come to appreciate the law, they argue, once people have a better grasp of its benefits. And foremost among these benefits is the law's prohibition of "pre-existing condition" exclusions in health insurance — which would prevent insurance companies from denying coverage to customers with serious medical problems.

Like most of the health-care bill's major provisions, this ban will not take full effect until 2014. But the mere prospect of finally addressing the "pre-existing condition problem" is held up as an enormous selling point of the law. At long last, the bill's advocates claim, America has a solution to a profound failing of our current system — a solution that will eliminate a source of worry for millions, and that opponents would not dare undo. Indeed, while describing the plight of a young woman in the audience at a rally he attended in April, Obama told the crowd: "If [opponents of the law] want to look at Lauren Gallagher in the eye and tell her they plan to take away her father's ability to get health insurance ... they can run on that platform."

The president's dramatic talents notwithstanding, the choice he presents is a false one. We do not face an either-or showdown between cruelly denying sick people treatment and a massive new federal health-insurance entitlement. The problem of covering Americans with pre-existing conditions is certainly real, but the notion that the only way to solve it is through a massive transformation of America's health-care system — one that will increase costs, raise taxes, displace millions of the happily insured, create a new entitlement, and undermine our private insurance sector — is simply wrong.

The case for repealing the newly enacted law, then, is not that there are no problems to solve in American health care. Rather, it is that there are far better solutions available....

The entire piece can be found here.

posted by James C. Capretta | 10:06 am
Tags: pre-existing conditions
File As: Health Care