October 24th, 2013

The Peril of Pre-Existing Conditions

In a case study highlighting how off course many Republicans have become from their professed ideals of free enterprise, limited government, and low taxes, the former spokeswoman for the Utah Governor, Angie Welling, recently railed against Mike Lee for his efforts to obstruct “Obamacare.”

Welling, a Republican, writes that her mother, a 16-year breast cancer survivor, is “uninsured and uninsurable.” Her cancer constitutes a pre-existing condition that “prevents her from obtaining health insurance.”

Today, God willing, Mom will sign up for health insurance on the federal health exchange. She will finally have coverage. That is, if you and your group of obstructionist legislators don’t ultimately get your way. You and your ilk are acting like schoolyard bullies – stomping your feet and making threats to upend the entire country if you don’t get what you want.

The debate over pre-existing conditions has been passionate and exhaustive. Those with a medical condition, past or current, feel slighted by insurance companies who refuse to provide them coverage. They largely consider medical coverage as a basic human right being denied them by greedy corporations, and therefore see their circumstance as unjust. Such persons—along with their family members and friends who are sympathetic to their situation—petition the government to intercede on their behalf, thereby compelling insurance companies to take customers that they otherwise would choose not to assist.

Insurance companies, like all companies, aim to be profitable. In their industry they must assess and manage uncertain risk in such a way that the catastrophic circumstances and associated expenditures do not bankrupt them. It would be financially inadvisable to take on many customers who require expensive medical treatment. Indeed, it would violate the entire nature and intent of insurance.

What is insurance? Insurance is the voluntary pooling of risk by a large number of people. Because any one person has a low risk of extreme illness or death, he or she can pay a low premium that in the aggregate can help defray the cost of care for those who do require expensive care. This premium is what is exchanged by the insured individual for a more certain future.

What is not insurance? Forcing these risk pools to take on people with pre-existing conditions, whose future can be easily predicted based upon their previous or current medical condition, defeats the purpose of managing uncertain risk. When “insurance” companies are coerced into providing coverage to those with known risks it is simply a socialization of their cost—requiring others to absorb the expenses required to medically care for those in need. This process turns insurance companies into an extension of the welfare system.

To be consistent, those who support requiring insurance companies to cover those with pre-existing conditions must also support forcing life insurance companies to offer policies to elderly individuals at death’s door. Think of it: a life insurance agency offering a $1,000,000 policy to a sickly man in hospice care, weeks away from death. Few individuals, and nobody with even a smidgen of economic understanding, would support compelling life insurance companies to cover those with this type of “pre-existing condition.”

Similarly, these individuals would have to support compelling home insurance companies to offer coverage to those whose homes were already destroyed in a tornado, fire, or other catastrophic event. They would also have to support forcing car insurance companies to include as customers those who have a record of reckless driving with multiple, costly accidents. This makes no sense.

Of course, we are made out to look like monsters when we suggest that insurance companies should not be forced to provide coverage for those they desire not to. Counteracting this stereotype is necessary, and charitable efforts must be made to show that the state should not be involved. At the same time, consequences are a required component of agency, and those who failed to plan for risk in their life should, at least to some degree, be made to feel the result of that inaction.

Pre-existing conditions do not provide justification to use coercion in an otherwise peaceful, voluntary commercial transaction. In most cases, but not all, they do in fact prevent an individual from obtaining insurance. But this is a financially prudent decision. Those who believe differently simply want to force the faceless masses—their neighbors—to help pay for their unforeseen expenses. This isn’t good or reasonable or necessary—it is tyranny.

13 Responses to “The Peril of Pre-Existing Conditions”

  1. October 24, 2013 at 1:08 pm #

    Insurance is essentially a bet about the future. Car insurance for example is a bet. I bet that I will get in an accident and the insurance companies pay the cost of that accident. The insurance companies bets confidently that I won’t get in an accident and earn the bet money. Sad thing is government is forcing us to make that bet which means in my case(haven’t had any of my fault accidents for almost 20 years since the beginning and young and in good health eating healthy and exercising frequently) the car and health insurance companies make the monthly fee.

  2. October 24, 2013 at 3:03 pm #

    What counsel would you give to those who are dealing with pre-existing conditions? In the second to last paragraph of your post, you state that consequences are a required component of agency. Are you implying that those with incurable chronic conditions should be made to feel the results of some inaction? Or that we’re all obligated to prepare financially for the crushing costs that accompany such conditions, and tough luck if we didn’t or couldn’t do so? I’m assuming you understand what it costs out-of-pocket to manage a chronic condition?

    What do you say to those faceless masses of chronically ill individuals, some of whom may be far healthier than you or me in every other measurable way, when they see your last paragraph as unfeeling? Is there a financially prudent solution that addresses their needs too?

  3. Connor
    October 24, 2013 at 3:11 pm #

    I was asked this question on Facebook. My reply there:

    “Save. Fundraise. Seek alternative treatments. Seek treatments in another country where prices are lower. Negotiate with doctors directly. Seek aid from churches, private groups, charitable hospitals, etc. Sell assets and liquidate savings to cover costs.”

    No, it’s not an enticing argument. But I simply can’t endorse the use of violence against people to compel them to assist those in need.

    Related post on this subject here.

  4. Chris Jones
    October 24, 2013 at 4:09 pm #

    I would add to this that there are government regulations that prohibit insurance companies from offering exception coverage, that is, covering everything except expenses relating to the pre-existing condition. In a free market, no one would ever be completely uninsurable. In this market, however, hundreds of thousands of people are, in the name of fairness.

  5. Kumozarusan
    October 24, 2013 at 7:20 pm #

    If the Parable of the 10 Virgins were retold in todays day in age, the 5 unwise virgins, Democrats, Progressives, socialists, and statists alike would all be lobbying their legislature for for a law that would force the 5 wise virgins and the rest of the wedding party to pay for more oil or be forced to give of their own carefully and wisely saved oil to those who did not bring reserves, just as society and/or insurance companies for now forced to pay for those who did not prepare for the future.

  6. Bobby
    October 26, 2013 at 11:51 am #

    Would you support some variation government funded healthcare that’s restricted only to the population of Americans with pre-existing conditions?

    I agree with you 100% that it doesn’t make any sense to force insurance companies to accept people with pre-existing conditions. I’m sure you’d also agree that there are a host of bad policies that are making healthcare in general way more expensive than it needs to be, and that we should be addressing each of those issues individually to make healthcare affordable overtime.

    The fact that healthcare is more expensive than it should be is exactly the reason why telling people they should “just try to save up for these expenses” is so offensive. While we unravel the bad government policies that are making healthcare unaffordable, we really need to offer an immediate solution to those families that really don’t have any realistic options now.

    Your thoughts?

  7. October 26, 2013 at 6:57 pm #

    I am someone with a pre-existing condition. I have a heart defect that I was born with. I have never had any symptoms or required any procedures or medication. My condition was discovered during a routine physical when I was 18. I take offense to your comment suggesting that people with pre-existing conditions have in some way “failed to plan”. In my case, it is actually the opposite that is true. It is in trying to plan that I face difficulty. I am a father, with two children. I have life insurance, that I pay about 10 times as much for than a “healthy” person. I want health insurance also, to plan for the potential risks in life.

    The policy argument is a longer discussion for another time. I just wanted you and your readers to understand that people like me are almost never in this situation because of a failure to plan.

    And your suggestion that I could solve my problem of access to health insurance through saving and fundraising implies an ignorance that is surprising.

  8. October 27, 2013 at 10:45 am #

    Thanks Conner. You’ve made the perfect case for the necessity of getting rid of insurance altogether – at least as an intermediary in health care delivery – the best and most humane care would be universal in nature. But with conservatives pushing to keep for profit insurance businesses as a part of the life care system, we lost the best option when progressives surrendered and said “ok, if the powers are too set against a universal system, so let’s go with the system the conservatives have been demanding as an alternative.” This a what we ended up with – a costly system with the middle-man-camel still completely under the tent.

  9. Bobby
    October 27, 2013 at 10:52 am #

    Robert, I’m a bit confused. Why does Chris’s story suggest the need for _universal_ government subsidized healthcare? Two other suggestions in this comment thread included Chris Jones’ suggestion that we change policy to encourage exception coverage, and my own suggestion of offering government subsidized healthcare specifically to the population of people with per-existing conditions. The combination of the two would allow people like Chris to get access to necessary healthcare.

  10. October 29, 2013 at 1:16 am #

    When government subsidizes pre-existing conditions don’t be surprised when we get more pre-existing conditions.

    But ruining the insurance market and destroying my insurance contract isn’t the solution either.

    I know of no doctor who would not help a desperate sick person. No neighbor who would not do the same. But charity as policy will not work.

    Still if we look at the Lord’s way, I know what will exalt us. If we never give ourselves the chance because we fear the alternative we would never come to a fallen world filled with tragedy.

    We’re all dead in the long run and have faith aren’t easily given or received answers in this case. But ensuring 100 people live a little longer while enforcing quasi benign servitude on 2000 others without them realizing it or against their will is also a bitter pill.

    No easy answers, but I assure you Obamacare or France care won’t make life any easier (else why do THEY protest and burn cars in the street).

    I disagree with Connor often and I’d even be OK with a pragmatic attempt to handle these cases. But I think the ideal is as Connor said. We place our faith in our fellow man and exhort them to do the works of righteousness with their own moral agency. All will be exalted in that process. No personal growth comes from filling out and even getting approved Obamacare forms. At best we prolong some life, but likely not even that.

  11. November 1, 2013 at 10:40 am #

    Why can’t we argue the same position in regard to income and social security taxes?

    why should I have to pay money to enable the current elderly generation, some as young as 60, to retire?

    I’ll do what I have to do to support my family. I’ll put my family’s needs first, before that of government and the greater community, even if it means the government doesn’t get everything in taxes from me which it thinks it is owed. It is better to obey the law of God than the laws of man. Paul said that. He also said “I am not my brother’s keeper”.

  12. November 3, 2013 at 10:08 pm #

    With little regard to the reality of how people find themselves in the position of being uninsurable, Connor dismissively assumes that they must have “failed to plan” and suggests the they simply “save, fundraise, and seek alternative treatments.” Pretty easy to say when you have supportive churches, friendly neighborhoods, and plenty of good friends (not to mention thousands of followers on Twitter). That may be the case for you, Connor, but it’s not for many.

  13. November 4, 2013 at 7:17 pm #

    I agree with you Christopher. Its nice to believe that everyone has the means to accomplish everything as stated. Within the last year I had an unexpected hospital stay. I planned to be healthy, did everything I knew on how to stay healthy. But in retrospect, I think some of the information was wrong or incomplete. I was a student, unemployed and on a scholarship. So I had a great amount of anxiety, not just for my health but also for staying in the program. Fortunately, I made it. That was with the help of charity care, and the Hindu god Hanuman. After I left the hospital I did his mantra nightly to help me manage my anxiety.

    I just really wish there was a broader safety net for the general public, and not just those with means. I don’t take the advice so kindly, especially when some of the advice has so many strings attached. Also, something about it sounds so incredibly selfish. The advice doesn’t sound like its promoting a spirit of compassion, generosity or of giving.

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