Both Democrats and Republicans are promising to preserve the Affordable Care Act’s popular “consumer protection” of people with pre-existing conditions. This is called guaranteed issue and community rating. Insurers cannot decline coverage, nor can they charge premiums based on risk (called underwriting). It is one of the main reasons why Exchange plans have become unaffordable for those who don’t receive subsidies.
Underwriting IS consumer protection—of subscribers who buy insurance when healthy and maintain continuous coverage. It protects them against escalating premiums, and against insurer insolvency. Insurers do NOT have the right to cancel your coverage or raise your premiums as soon as you become sick. That should be in your contract, enforceable by the state.
Insurance is a VOLUNTARY risk-sharing agreement. People do not voluntarily pay five times as much as their risk indicates to protect others who live in fire traps, engage in sky-diving, or have a bad driving record. That’s why homeowner’s and auto insurance are reasonably priced. Underwriting encourages prudent, responsible behavior, and consistently paying your fair share.
The “pre-existings” problem affects only about 7 percent of Americans, who are in the individual insurance market. The reason it has become a problem is that most health insurance is tied to employment, and people frequently change jobs. “Job lock” results from the tax code: employment benefits are free of payroll and income tax, while individually owned insurance must be purchased with after-tax dollars.
The ACA approach is to OUTLAW INSURANCE, which is voluntary, and replace it with INVOLUNTARY redistribution of wealth. Before ACA, people with pre-existings were receiving medical care. Some had insurance reimbursement through state high-risk pools, abolished by ACA. There are many ways to help unfortunate people with uninsurable needs besides destroying the insurance market for everyone.
Questions for candidates:
(1) Should Americans be allowed to purchase affordable coverage that meets their own needs?
(2) Should the federal government end tax discrimination against individually owned health insurance, which contributes greatly to coverage challenges for those with pre-existing conditions?