Prexisting Conditions & Insurance

[Bradr]

Hey guys, I need some clarification on a topic. Here goes...

 

I saw this picture posted on facebook this morning:

 

 

My understanding is that insurance is risk management - where the buyer pays the seller to mediate the risk of loss. If the loss has already occurred, then it is not insurance. It is a company paying for a person's condition.

 

My question is what makes insurance for pre-xisting conditions a fair proposal for anyone but the uninsured? Seems like taking of advantage of a business to me, and I cannot see how a business model supports insurance for pre-existing conditions can ever sustain itself without massive government aid. Is PCIP insurance federally financed?

 

It wouldn't make sense to buy car insurance after an accident, home insurance after a fire, or life insurance after the death of a family member. Why is this type of health insurance different?

 

Any facts and insights would be welcome.

[Hingle McCringleberry]

The logic IIRC is, force everyone into a pool, or pools, and the extra risk taken on by insuring people like this, is offset by the 18-34 year olds that might not see a Dr. for years if not decades. The problem is to make that work, you need to force people to buy a product, they may not want or need, to keep from breaking the law.

 

The problem with your thought process is after a fire you would still want your new home (or rebuilt) to have fire coverage. If State farm turned back and said well your home burnt down, now you can never have fire coverage, it wouldnt be fair.

 

Dont get me wrong I am opposed to 99.9% of Obama care, but I DO think finding ways for people with pre-exsisting condtions to get coverage is a good thing. Although the currently proposed soultion isnt the best way. I figure something like the high risk driver (SR22 in Nebraska?) where we have companies that make it there bussiness on covering high risk medical, then after a time they could transtion back to something like Blue Cross.

[carlfense]

If the loss has already occurred, then it is not insurance. It is a company paying for a person's condition.

The problem is that insurance companies would refuse to insure people with pre-existing conditions . . . not just decline to cover the pre-existing issue but decline to insure them at all.

 

It's more complicated than that . . . but that's the quick and dirty version.

 

Basically, if a person has health issues and for whatever reason they have to change insurance (new job, lost job, can't afford old insurance, etc.) prior to the ACA insurance companies could and would refuse to insure them. Canttakeitanymore is spot on with his point about risk pooling. This is one of those areas in medicine where there is a somewhat awkward intersection between necessary care, profit margins, and morality. Touchy subject with high emotions.

[carlfense]

The logic IIRC is, force everyone into a pool, or pools, and the extra risk taken on by insuring people like this, is offset by the 18-34 year olds that might not see a Dr. for years if not decades. The problem is to make that work, you need to force people to buy a product, they may not want or need, to keep from breaking the law.

 

The problem with your thought process is after a fire you would still want your new home (or rebuilt) to have fire coverage. If State farm turned back and said well your home burnt down, now you can never have fire coverage, it wouldnt be fair.

 

Dont get me wrong I am opposed to 99.9% of Obama care, but I DO think finding ways for people with pre-exsisting condtions to get coverage is a good thing. Although the currently proposed soultion isnt the best way. I figure something like the high risk driver (SR22 in Nebraska?) where we have companies that make it there bussiness on covering high risk medical, then after a time they could transtion back to something like Blue Cross.

What of the other 99.9% in particular do you oppose?

[Hingle McCringleberry]

I think we have a thread on this but I will give my highlights... The fact I have to buy a product, to be a law abiding citizen. The expasnion of the IRS to make sure I am following the law. Penalties for not buy a product (also breaking the law by not paying them). Taxing so called "Cadillac" plans, that will have companies cutting plans to get under the limits. The ability to now dump sicker employees into state plans, opening them up to reduced over all access to health care, due to reduced payments (see medicare). A 2.3 percent medical device tax, that will have an impact on R&D those areas. The fact it will be cheaper for many companies to dump their people into the sate plans, and pay to fine, than keep the coverage. The ability to offer waviers to the plan, that seem to mainly go to those with gov. connections (to be fair, I think they plugged this). The Medical Review Board, on the surface these look OK, but as with most things I think they are open to corruption, politicalization, and could possibly step beyond just looking at Rx, and into proceduers (as I understand it they are only to looking at Rx, again something I'm not crazy about, but can see a benefit, as some Docs over perscribe).... I could go on, but lets just say it's 99.5, maybe .4....

[carlfense]

<snip> The ability to now dump sicker employees into state plans, . . . <snip> . . . The fact it will be cheaper for many companies to dump their people into the sate plans, and pay to fine, than keep the coverage. <snip>

Eh?

[NUance]

re the OP, just because this woman’s job doesn’t provide health insurance doesn’t excuse her from having it. Sure, there is no requirement to have health insurance. But if you get sick you should expect to pay for your own care. The problem is, few people can afford to do this. Medical costs are so incredibly inflated in the U.S. almost nobody can afford to pay for their own care in the event of a major illness. On the other hand it is incredibly expensive to obtain health insurance as an individual, like this woman should have been doing to begin with. And even if you have an individual policy in place during all your healthy years, the insurance company will do everything they can to screw you over if you have large claims due to a major illness. ObamaCare is FAR from perfect. But at least it helps out people like this woman who would otherwise fall through the cracks. Our health care/health insurance industries are so screwed up I hate to think about what would happen to my family if I ever got sick.

[Hingle McCringleberry]

<snip> The ability to now dump sicker employees into state plans, . . . <snip> . . . The fact it will be cheaper for many companies to dump their people into the sate plans, and pay to fine, than keep the coverage. <snip>

Eh?

 

Should of called them exchanges not plans for starters...

 

I was wondering if that was clear, sorry abot that. The first part is about an article from some U of Minn profs that says employers could dump sick employees into the state exchanges, thus reducing the costs to the company. http://www.kaiserhealthnews.org/stories/2011/november/30/employers-dump-sickest-employees-public-heath-care.aspx

 

 

The second part is sort of related, and refers to companies dumping ALL of the employees on to the state exchange, and coming out ahead because the fine would be less than what they are paying for coverage now. In my current situation, my company pays $8500 per employee (single). If they were to drop coverage they would pay a $2000 fine, obviously saving over six grand per employee. More in the following link. Hope that clears a few things up.

 

http://www.economist.com/blogs/schumpeter/2011/07/business-and-health-care-reform

[strigori]

Hey guys, I need some clarification on a topic. Here goes...

 

I saw this picture posted on facebook this morning:

 

 

My understanding is that insurance is risk management - where the buyer pays the seller to mediate the risk of loss. If the loss has already occurred, then it is not insurance. It is a company paying for a person's condition.

 

My question is what makes insurance for pre-xisting conditions a fair proposal for anyone but the uninsured? Seems like taking of advantage of a business to me, and I cannot see how a business model supports insurance for pre-existing conditions can ever sustain itself without massive government aid. Is PCIP insurance federally financed?

 

It wouldn't make sense to buy car insurance after an accident, home insurance after a fire, or life insurance after the death of a family member. Why is this type of health insurance different?

 

Any facts and insights would be welcome.

For starters we shouldnt even have this type of health care. The comparisions you make about auto, home and life insurances typically only result in the loss of money or property should you not have them. A lack of health insurance can mean you die.

 

The 'Obama Care' is a step in the right direction to a single payer system. Which is really what we need. Then we don't have cases like this at all.

[carlfense]

<snip> The ability to now dump sicker employees into state plans, . . . <snip> . . . The fact it will be cheaper for many companies to dump their people into the sate plans, and pay to fine, than keep the coverage. <snip>

Eh?

 

Should of called them exchanges not plans for starters...

 

I was wondering if that was clear, sorry abot that. The first part is about an article from some U of Minn profs that says employers could dump sick employees into the state exchanges, thus reducing the costs to the company. http://www.kaiserhea...heath-care.aspx

 

 

The second part is sort of related, and refers to companies dumping ALL of the employees on to the state exchange, and coming out ahead because the fine would be less than what they are paying for coverage now. In my current situation, my company pays $8500 per employee (single). If they were to drop coverage they would pay a $2000 fine, obviously saving over six grand per employee. More in the following link. Hope that clears a few things up.

 

http://www.economist...lth-care-reform

Prior to the ACA your employer could have dropped coverage and saved $8,500 per employee. They (apparently) did not. Why is that? And why is saving $6,000 per employee more attractive to your employer than saving $8,500 per employee?

 

Sorry for not seeing that plan meant exchange. There is so much misinformation about the ACA out there.

 

(BTW, Kaiser is an excellent resource for this stuff. Happy to see them referenced!)

[HSKR]

<snip> The ability to now dump sicker employees into state plans, . . . <snip> . . . The fact it will be cheaper for many companies to dump their people into the sate plans, and pay to fine, than keep the coverage. <snip>

Eh?

 

Should of called them exchanges not plans for starters...

 

I was wondering if that was clear, sorry abot that. The first part is about an article from some U of Minn profs that says employers could dump sick employees into the state exchanges, thus reducing the costs to the company. http://www.kaiserhea...heath-care.aspx

 

 

The second part is sort of related, and refers to companies dumping ALL of the employees on to the state exchange, and coming out ahead because the fine would be less than what they are paying for coverage now. In my current situation, my company pays $8500 per employee (single). If they were to drop coverage they would pay a $2000 fine, obviously saving over six grand per employee. More in the following link. Hope that clears a few things up.

 

http://www.economist...lth-care-reform

Prior to the ACA your employer could have dropped coverage and saved $8,500 per employee. They (apparently) did not. Why is that? And why is saving $6,000 per employee more attractive to your employer than saving $8,500 per employee?

 

Sorry for not seeing that plan meant exchange. There is so much misinformation about the ACA out there.

 

(BTW, Kaiser is an excellent resource for this stuff. Happy to see them referenced!)

 

From what I have been told from someone who deals with employee benefits is the $8500 isn't simply something the employer could be saving, the benefit is a part of their pay, something they can offer to them at a more affordable cost then the individual could buy on there own because of group rates. If the employee tried to get the same policy on their own it may cost him $11,000 instead. So instead of the employer paying the employee $20/hr, they pay them $17/hr with the benefit. I don't know how accurate that math is btw, just pulling numbers out of my butt just to give an example. It ends up being a better deal for both employer and employee.

 

What the fear is with Obama care is the insurance companies will end up raising their rates because they know they will not be competitive with the governments group policy. They will try to get every last penny they can before they go belly up, which in the end many of the Obama care supporters want anyway, so its a double victory. So if the $8500 suddenly jumps to $15000, it's going to be cheaper for the employer to drop health coverage, pay the fine and pay the employee $19/hr instead and get out of the health care benefit completely. Many see this as the end of private health care insurance. It will eventually lead to total government dictation on what is or isn't covered and when you can get it taken care of. You will have no choice, not that the choices seem to be too great anyway, but it is still a choice.

[HSKR]

Another thing I might add is government or private, I honestly don't believe healthcare will ever get more affordable, at least in our lifetimes. Do you ever ask yourself why it is so expensive? Pricey Doctors? Greedy insurance or pharmaceutical companies? I'm not exactly old yet, but I have been around long enough to see the medical field has been completely revolutionized in the amount of procedures and techniques now used. In the old days, if you got cancer, you died, that's pretty affordable. Now you can spend hundreds of thousands of dollars on treatments fairly easy and that has to be paid for. Got blockage in the heart? You had a heart attack and died. Now we have amazing procedures to put stints in and treat you with medicines that help remove the blockage, but it costs money. Oh and did I mention the 15 follow up visits with the doctor? Yea, that costs too. Hip replacements, knee replacements, etc. When I was a kid, it was more likely the individual simply got a cane, walker or even wheelchair lived the rest of their life that way. Don't forget the the six weeks of physical therapy that comes with that and yea, that costs as well. Now we understand mental illnesses much better as well and have much better care and meds for that, but it costs a crapload.

 

Now I am not saying that these things are bad, I'm just trying to show the point that it costs a lot of money of this stuff. For you that are young, you may not realize it yet, but as you get older you will understand how rapidly the medical field is changing but that change and addition of procedures costs money. I just don't see how it will ever get cheaper when we get treated for things that 10, 25, 50 years ago didn't even exist. The ONLY way you reverse the costs in any significant way is to simply go old school and limit the amount of medical treatment you get and this is why many are concerned with Obamacare because when they figure out they don't have the money or resources to treat people, you will get put on a waiting list. Hope you last that long.

[Mavric]

If the loss has already occurred, then it is not insurance. It is a company paying for a person's condition.

The problem is that insurance companies would refuse to insure people with pre-existing conditions . . . not just decline to cover the pre-existing issue but decline to insure them at all.

 

It's more complicated than that . . . but that's the quick and dirty version.

 

Basically, if a person has health issues and for whatever reason they have to change insurance (new job, lost job, can't afford old insurance, etc.) prior to the ACA insurance companies could and would refuse to insure them. Canttakeitanymore is spot on with his point about risk pooling. This is one of those areas in medicine where there is a somewhat awkward intersection between necessary care, profit margins, and morality. Touchy subject with high emotions.

I don't necessarily disagree with your point but I think it would get pretty hard to decide what procedures were only due to the pre-existing condition and which were new conditions. For example, if you had back surgery then developed a staph infection from the incision, was the infection an extension of the the back problem or is it a new issue? If you had stomach cancer then later developed liver cancer, how would that be handled? Some things would be obvious but a lot of others would just lead to more legal battles, costing more.

 

Also, a certain company might not insure them but (and I'm no expert at this so someone can correct me if I'm wrong) aren't there high-risk pools that people can get into? I believe this was reference earlier. So it's maybe not so much that they can't get any insurance, just that they have to pay more for it.

[JJ Husker]

OP- I don't think you need any clarification. Sounds to me like you understand it fully. It is simply our government helping to replace personal responsibility with other peoples money. Really just more of the same.

[redblooded]

Another thing I might add is government or private, I honestly don't believe healthcare will ever get more affordable, at least in our lifetimes. Do you ever ask yourself why it is so expensive? Pricey Doctors? Greedy insurance or pharmaceutical companies? I'm not exactly old yet, but I have been around long enough to see the medical field has been completely revolutionized in the amount of procedures and techniques now used. In the old days, if you got cancer, you died, that's pretty affordable. Now you can spend hundreds of thousands of dollars on treatments fairly easy and that has to be paid for. Got blockage in the heart? You had a heart attack and died. Now we have amazing procedures to put stints in and treat you with medicines that help remove the blockage, but it costs money. Oh and did I mention the 15 follow up visits with the doctor? Yea, that costs too. Hip replacements, knee replacements, etc. When I was a kid, it was more likely the individual simply got a cane, walker or even wheelchair lived the rest of their life that way. Don't forget the the six weeks of physical therapy that comes with that and yea, that costs as well. Now we understand mental illnesses much better as well and have much better care and meds for that, but it costs a crapload.

 

Now I am not saying that these things are bad, I'm just trying to show the point that it costs a lot of money of this stuff. For you that are young, you may not realize it yet, but as you get older you will understand how rapidly the medical field is changing but that change and addition of procedures costs money. I just don't see how it will ever get cheaper when we get treated for things that 10, 25, 50 years ago didn't even exist. The ONLY way you reverse the costs in any significant way is to simply go old school and limit the amount of medical treatment you get and this is why many are concerned with Obamacare because when they figure out they don't have the money or resources to treat people, you will get put on a waiting list. Hope you last that long.

 

This is exactly why for profit insurance is bullsh#t. It's making money from population statistics, yet it's absolutely in the "provider's" benefit to make sure that you don't get coverage for any condition in which they'd lose profit from you. They are there to bet that the pool of people they cover costs less then their premium amounts minus their expenses simply for pooling and offsetting the money you pay in. That's why you've seen huge lawsuits made into movies like "The Rainmaker". Insurance companies aren't there for you, they are there to pool you into a group and charge you above the mean cost of your lifetime health coverage then cut out the upper outliers for their own profit... Just pray you aren't one. It's basically a reverse lottery where they control the payouts.

 

Frankly they could do the same being state run, probably better since they'd have continuous records from the population instead of hit or miss blips from the population trying to not incur a deductable. Plus everyone having to pay into the same pool. Except then we hit the old problem of kickbacks to political friends. Which dives us right back into the heart of the problem, political contributions. That's what pretty much every issue is deflecting attention from. It is the root cause.

 

All insurance is basically just a prepaid loan pool by a bunch of people so that it can statistically cover the cost of unexpected expenses plus executive salaries from that pool and any interest they make on it. (Which they do, anytime you prepay anything you give them more then you receive, do a quick net-present-value search)

 

Yet universal health insurance is evil and socialist. Not to mention completely unAmerican, but we all fund the military in the same way.

 

The whole basis of anti-universal heath care is "I don't want to pay for those unhealthy people" and that's the gist of Insurance too. Yet you do it either way. Through taxes for people that hold off till they get emergency care. It's moronic and totally republican. Someone needs to start the MATH party, to do what makes sense numbers wise, just with enough common sense to not take it into "social" conservative/liberal areas.

 

but if they really wanted to solve these issues they'd be listening to people like Lawrence Lessig (from about 14:50 on) about campaign reform.

 

Then maybe politicians would do the right thing, and explain it to the slow... i.e. republicans that cant wrap their heads around the math the simple fact they won't ever statistically benefit from tax breaks for the 99.5% nor will they ever get there even if they hit the powerball.