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Practically Speaking

Kyle and her husband moved to Brookfield in 1986. She became active in local politics and started blogging in 2004. Her focus is primarily on local issues but often includes state and national topics, too. Kyle looks at things from the taxpayers' perspective in a creative, yet down to earth way, addressing them from a practical point of view.

Pre-existing conditions: Could any insurance company stay solvent this way?

Health care, President Obama, TAXES

One of the many things Obamacare Health Care reform promises to correct is eliminating the pre-existing condition exclusion from private health insurance policies. As I understand it, Obamacare will force all insurance companies to cover pre-existing conditions without increasing their premiums. (Page 18, lines 4 - 23 of the Baucus Senate Finance Committee bill, a pdf of all 1,502 pages of the bill.)

Another Obamacare mandate is that all Americans must carry health insurance whether they want it or not. If they do not obtain health insurance, they will be fined or taxed, initially at a rate of $200 during the year 2014 phase in period, on up to $750 in year 2017. (Page 197, lines 2 -6 of the bill)

So during the year 2014 phase-in period, some people might be tempted to not enroll in any health insurance plan. After all, under Obamacare rules, if they get sick, they just pay the $200 fine and then they can get health insurance.

How on earth could any insurance company offer that kind of coverage?

Let's just look at homeowners insurance. Wouldn't you like to eliminate your yearly premiums and not worry about a tree falling on your home or worse yet, a catastrophic total loss due to fire? If homeowners insurance followed Obamacare rules, all you would have to do is pay that $200 tax/fine and then get full coverage!

What about auto insurance? Don't bother to insure your cars, just drive uninsured. Get in an accident? Just pay the fine and get your car repaired and your insurance company will pay for damages and liability. Or, drive like a maniac, rack up accidents and tickets without worry you will be dropped or charged more.

Nice, eh?

Obviously, doing business that way, no insurance company could remain solvent for long, without raising it's premiums drastically. Yet, that is pretty much how Obamacare Health Care reform is set up in it's present state.

Maybe that is the whole idea?

Only government can offer coverage like that without solvency worries. (The government just increases taxes, fees and the deficit to cover losses.)

Unlike driving recklessly, sometimes we get sick through no fault of our own. So how do health insurance companies handle pre-existing conditions?

Stay tuned for the next installment: About those pre-existing conditions.

Links: 

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Brookfield7, Fairly Conservative, BetterBrookfield, Vicki McKenna, Jay Weber, The Right View Wisconsin, Randy Melchert, Mark Levin, The Heritage Foundation, CNS News, Breitbart BigGovernment

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