Distributism and Health Care Reform V

...Continued from Part I, Part II, Part III, and Part IV.

The Problem of Those with Pre-existing Conditions

Before addressing the problem itself, I think it's important to remember that the nature of insurance is a gambling institution. Demands that insurance companies take on people with pre-existing conditions are nothing less then forcing them to take a bet that they know they have already lost. After all, why would anyone bet that you won't get sick if they know you already are sick? It is basically like saying, “I have a condition that's going to cost you a million dollars in payments. You have to cover this for a compensation of a few thousand dollars a year.”The real problem with pre-existing conditions is why people with them are applying for new insurance coverage. In some cases they simply couldn't afford it. Fixing the barriers to charitable medical treatment would go a long way for most of these people. In other cases, they simply chose not to get insurance even though they could have afforded it. Charitable services could also address the needs of these people when they are in dire need, but charity also requires that we hold them accountable for their own choices. It is fundamentally unjust for those who can afford it to use up the resources people establish to help those who cannot.However, I believe the largest group impacted by pre-existing conditions are those who get their medical insurance through their employer. Because the policy is with the employer, rather than with the employee, the loss or change of job forces the loss or change of insurance. If insurance policies were required to be directly with the insured, rather than with the employer, the loss or change of job would not force the loss or change of insurance policy. This change would not eliminate the reduction of costs through group policies. Insurance companies could still make deals with employers to offer package deals for employees. Such offers are given in order to increase the number of people who have policies. Having the policy be with the employee increases the chances that the insurance company will keep a policy holder even if he does change jobs. What insurance company would not like that? At the same time, it would increase competition because, when an employee changes jobs, the insurance company working through that new employer would want to offer a better package or lower premium to entice the new employee to switch to their company. This would also give the current insurance company incentive to keep their premiums low so that the customer won't switch insurance when changing employers.Unfortunately, that change alone will not completely address the problem of pre-existing conditions because it does not address the problem of people losing their insurance when it comes time for renewal. Many people think that renewing their policy is simply extending their existing contract. Actually, it is establishing a new contract, even if it has the same terms, for a new time period. Therefore, other solutions need to be offered. Just as we require other gambling institutions to guarantee that there will be winners, the insurance gambling institutions need to guarantee options that will provide continued coverage in extreme situations. Such guarantees could be allowing, or requiring, options for insurance that only covers maternity (when applicable), major illnesses, and emergencies with options for long term or lifetime insurance plans. This could reduce the cost of health insurance by not forcing insurance companies to cover the cost of non-critical services. The point is that people are often limited in what policy options they have. They will be even more limited under Obamacare. Lifetime policies would resolve the issue of people who get dropped when it's time to renew an existing policy.I believe that, in a truly competitive market, an insurance policy that only had to provide for maternity, emergencies and major illnesses would have a fairly low premium even if it were a lifetime policy that could only be canceled for failure to pay. You could even throw in regular check-ups and still keep the costs down. Remember that we are discussing gambling here. The average person does not get a major illness, which means the house (the insurance company) will win the bet the vast majority of the time. When they do lose, they will have to pay out big, but that cost will be more than offset by the income from all of the other policy holders that don't get a major illness.

In Conclusion

There are undoubtedly other factors that should be listed and addressed. They can also be addressed by applying distributist principles.By revoking or changing laws that effectively establish barriers to greater competition in the medical market within states, and those that establish barriers or drive up the cost of medical schooling, treatment, research, and equipment, Distributism would help to increase the number of medical providers and bring the cost of medical care down through greater competition.By revoking or changing laws that allow extreme awards and drive up the cost of insurance in general, and by allowing doctors to establish cooperative associations to establish or obtain insurance at a lower cost and assist new entrants with medical training, Distributism would help reduce the cost of the medical business itself, which, combined with competition, would help reduce the cost of medical care.By revoking the tax barriers that discourage the charitable contribution of time, money, and resources to organizations that offer medical treatment to those in need, Distributism would help to address the medical needs of those who cannot afford the cost of medical care or insurance.By allowing, or even funding, research on the comparative effectiveness of alternate treatments and medicines with “advanced” treatments and medicines, Distributism would help provide greater access to affordable and still effective health care.By establishing laws that allow individuals and families to keep their insurance policies when they change jobs, and by requiring options for long term and even life time policies, Distributism would help alleviate the problem of people losing their insurance for pre-existing conditions when they change jobs or have to renew their policy.