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07/04/2017

Healthcare Insurance vs. Healthcare coverage?

Kimberly Strassel wrote an interesting piece in the WSJ entitled “The Simplicity of a Health Deal” (Link here – subscription required). I don’t think she was saying that crafting legislation to resolve all of America’a healthcare issues was easy, she was making the political point to Senate Republicans that, like it or not, no future legislation will be possible unless they agree to continue the ObamaCare provision of eliminating insurance proscriptions for pre-existing conditions. She cited a YouGov poll that showed 77% supported protections for those with pre-existing conditions as an example of the public support for this provision.

The problem with pre-existing conditions is that they cost more money to insure than not-yet-existing conditions. This fact is the primary reason for the unpopular provision of Obamacare – The Mandate (or tax, if you like). If you delay buying insurance until your not-yet-existing condition becomes an exiting condition, what exactly are you insuring? This “gaming the system” is illegal and for good reason. Without the mandate (that everyone buy some minimal level of insurance), insuring pre-existing conditions is very expensive. Insuring pre-existing conditions has turned out to be more expensive than anticipated, even with the weak mandate/tax, and insurance providers have been and are continuing to leave Obamacare, further reducing insurance options in many states. Failure to make significant changes in the present law (i.e. leaving Obamacare as is) would likely result in further reduction in the number of insurers and the cost of their products.

I find it odd that we continue to refer to ObamaCare or whatever the new Republican iteration will be as health insurance. Wikipedia describes insurance as a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Life insurance and car insurance are good examples. Premiums charged for these types of insurance policies are based upon one’s risk or lack thereof, as well as how much risk an individual wished to mitigate. Essentially, these are catastrophic risks we are taking about. Healthcare insurance has morphed into healthcare coverage. We expect our health insurance to pay for everything that has to do with accessing a healthcare provider: routine office visits, medications, emergency/trauma care and end-of-life support, to name but a few. That would akin to asking our car insurance to not only handle major accidents but also gas and oil purchases.Of course, taking the car insurance analogy to its logical conclusion suggests that just as there are some people that have such a terrible driving history that they simply are not insurable, there are similar people who are not insurable based upon their terrible health history. Eliminating pre-existing condition proscriptions effectively turns the insurance model on its head as a means for risk mitigation.

If we are going to eliminate pre-existing conditions, we are essentially agreeing healthcare insurance isn’t the way to pay for healthcare, at least the essential aspects, whatever those are. We are also agreeing that those essential aspects are basic rights, without an open and honest agreement on exactly how to pay for those rights. We need to have the discussion of what exactly constitutes basic or minimal healthcare rights and then we need to have the discussion about how to obligate those providing those rights (required as part of licensure, reforming malpractice, adjusting reimbursement, etc..).

My “Happy Fourth of July” daydream is that Congress would have such a debate, aided perhaps by many bioethicists from many persuasions. Tomorrow, I will wake up and go back to work.

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