Obama on pre-existing medical conditions

MedSave Admin | October 9, 2008

As the likelihood of Barach Obama becoming our next president increases, it makes more sense to listen for the issues that he is really passionate about. One of those ideas is that health care is a right, not a privilege. Another is about health insurance coverage for pre-existing conditions. The story he tells about his grandmother arguing about her coverage from her deathbed is heat-wrenching.


We have always believed that the impact of the chief executive on America's health care policy will not be significant. History supports this, and the health care reforms that will become reality over the next four to eight years are already in the evolutionary process of formation without the President's endorsement. The stage is set, with or without Mr. Obama, for a shift in health care from the institutional control to individual control. MedSave.com has grown with this wave and is poised to thrive under the next presidency, especially if Mr. Obama I able to have his way with health care reform. So why would we be concerned about Mr. Obama's attitudes? Obama believes that health care is a right, not a privilege. He extends that belief to health insurance coverage for pre-existing conditions. The story he tells about his grandmother arguing about her coverage from her deathbed is heat-wrenching.


Obama's stance on exclusion of pre-existing conditions is a concern because it adds fuel to the fire of those who believe they are entitled to health care without taking responsible actions themselves. We know that employers are already slowly exiting the heath care market. This 20 year old trend gathers more momentum each year and is not likely to change course. Employer-provided health benefits now focus on catastrophic coverage only, leaving the majority of heath expenses to the individual. It hardly makes sense to propose that employers or the government will take care of our medical bills. Encouraging this attitude of "you have to take care of me" will lead to social disaster and more heartache in the future.


Obama paints insurance companies who exclude coverage for pre-existing medical conditions as "evil" and hints at profit motives as the cause of this behavior. Yet a closer look shows this makes no sense. Insurers would be pleased to cover pre-existing conditions if that is what the market demanded. After all, insurance company profits are based and regulated as a percentage of premiums - the higher the insurance premium the greater the profit. Insurers benefit greatly from the state mandates that require coverage under group health plans for a wide range of items, including coverage for pre-existing medical conditions. But the individual insurance market is different and Mr. Obama does not seem to recognize the distinction.


Clearly most individual insurance buyers do not want higher cost policies that are required to cover pre-existing medical conditions. All of the extremely popular short term major medical insurance plans keep coverage affordable by excluding coverage for pre-existing medical conditions. After all, this insurance is meant as temporary coverage for already financially stressed individuals. Other leading low cost major medical health insurance carriers like Golden Rule Insurance and Celtic Insurance keep premiums low by prudently limiting coverage for pre-existing medical conditions and not offering coverage to those who could not cope with such limitations. Supplemental insurance plans cover pre-exiting conditions by using a waiting period before this specific coverage applies. All of these are valid and welcome options by some nsurance buyers. Of course not every health plan design is meant to appeal to everyone.


A few of these same insurance companies do offer insurance that covers pre-existing conditions by law in New Jersey and virtually nobody buys them because the cost (based on actual claims) is astronomical! A typical health insurance policy for individuals in New Jersey cost more than a mortgage. If all of our insurance policies covered pre-existing conditions, the cost would be at least 60% more immediately and the rate of cost escalation is hard to even imagine. Insurance plans that exclude coverage for pre-existing medical conditions may be an evil thing to a small minority of policyholders, but a financial blessing to the large majority of us.


In the end, it is a very simple choice. We can have complete comprehensive health insurance coverage that most can not afford or we can have limited benefit health coverage that is affordable to everyone. But we can not have both. Having both choices available to us as an individual choice fits our definition of "the American way". Gee isn't this what we have already?

Tags : health care reform, obama, pre existing

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