6 Things About Pre-Existing Conditions Republican Leaders Still Don’t Get

Instead of promoting better policies, House Republican leaders would like to cave to socialized medicine in the most efficient manner possible.

By Christopher Jacobs
February 18, 2019

“If at first you don’t succeed, go ahead and quit.” That might be the takeaway from excerpts of a conference call held earlier this month by House Minority Leader Kevin McCarthy (R-CA), and published in the Washington Post.

McCarthy claimed that Republicans’ “repeal and replace” legislation last Congress “put [the] pre-existing condition campaign against us, and so even people who are [sic] running for the very first time got attacked on that. And that was the defining issue and the most important issue in the [midterm election] race.” He added: “If you’ll notice, we haven’t done anything when it comes to repealing Obamacare this time.”

While entirely predictable, McCarthy’s comments make little sense, on multiple levels. Abject surrender may make Republican “leaders” feel better about themselves, but it won’t solve their fundamental problems.

Problem 1: Pre-Existing Condition Provisions In Context

I first noted this dilemma last summer: Liberals call the pre-existing condition provisions “popular” because their polls only ask about the policy, and not its costs. If you ask Americans whether they would like a “free” car, how many people do you think would turn it down? The same principle applies here.

When polls ask about the trade-offs associated with the pre-existing condition provisions—which a Heritage Foundation study called the largest driver of premium increases under Obamacare—support plummets. Cato surveys in both 2017 and 2018 confirmed this fact. Moreover, a Gallup poll released after the election shows that, by double-digit margins, Americans care more about rising health premiums and costs than about losing coverage due to a pre-existing condition.

The overall polling picture provided an opportunity for Republicans to push back and point out that the pre-existing condition provisions have led to skyrocketing premiums, which priced 2.5 million people out of the insurance marketplace from 2017 to 2018. Instead, most Republicans did nothing.
Problem 2: Republicans’ Awful Legislating

McCarthy’s comments referred to an amendment offered by Rep. Tom MacArthur (R-NJ), who lost his re-election bid in November. The House and Senate bills all suffered from the same general design flaw: They went far enough in repealing Obamacare regulations to prompt political attacks from Democrats, but not far enough for Republicans to tout much tangible benefit for consumers.

The bills’ flaws came from a failure to understand how Obamacare works. The law’s provisions requiring insurers to offer coverage to everyone (guaranteed issue) and price that coverage the same regardless of health status (community rating) make insurers want to avoid covering sick people. Those two provisions necessitate another two requirements, which force insurers to cover certain conditions (essential health benefits) and a certain percentage of expected health costs (actuarial value).

In general, the House and Senate bills either repealed, or allowed states to waive, the latter two regulations, while keeping the former two in place. If Republicans had repealed all of Obamacare’s insurance regulations, they could have generated sizable premium savings—an important metric, and one they could tout to constituents. Instead, they ended up in a political no man’s land, with people upset about losing their pre-existing condition “protections,” and no large premium reductions to offset that outrage.

Looking at this dynamic objectively, it isn’t surprising that McCarthy and his colleagues ended up with a political loser on their hands. The true surprise is why anyone ever thought the legislative strategy made for good politics—or, for that matter, good (or even coherent) policy.

Problem 3: Pre-Existing Conditions Aren’t Going Away

McCarthy evidently believes that endorsing Obamacare’s pre-existing condition provisions will buy House Republicans time and silence from the left. In reality, appeasement will work about as well for Republican “leaders” as it did for a “leader” like Neville Chamberlain.

Within hours after Sen. Thom Tillis (R-NC) introduced a bill last year maintaining Obamacare’s pre-existing condition provisions—the requirement that all insurers offer coverage at the same rates to all individuals, regardless of health status—liberals weighed in to call it insufficient:

As noted above, Obamacare encourages insurers to discriminate against people with pre-existing conditions. Repealing only some of the law’s regulations would exacerbate that dynamic, by giving insurers more tools with which to avoid enrolling sick people. Liberals recognize this fact, and will say as much any time Republicans try to modify any of Obamacare’s major insurance regulations.

To put it in more crass political terms: Republicans face the same political dynamic they faced earlier this decade, when any talk of entitlement reform prompted attack ads portraying the party as wanting to throw Grandma off a cliff. As with the “Mediscare” ads, attacking Republicans on pre-existing conditions is now part of the Democratic playbook—so McCarthy and his colleagues had better put on their big boy pants, get used to the attacks, and come up with responses to them, rather than just quivering in a corner and hoping the issue goes away. Because it won’t.

Problem 4: Better Policies Exist

According to the Post, McCarthy said he wants to recruit candidates who would “find a solution at the end of the day.” A good thing that, because better solutions for the problems of pre-existing conditions do exist (I’ve written about several) if McCarthy had ever bothered to look for them.

Their political attacks demonstrate that liberals focus on supporting “insurance” for people once they develop a pre-existing condition. (Those individuals’ coverage by definition really isn’t “insurance.”) By contrast, conservatives should support making coverage more affordable, such that people can buy it before they develop a pre-existing condition—and keep it once they’re diagnosed with one.

Regulations proposed by the Trump administration late last year could help immensely on this front, by allowing employers to subsidize insurance that individuals hold and keep—that is, coverage that remains portable from job to job. Similar solutions, like health status insurance, would also encourage portability of insurance throughout one’s lifetime. Other options, such as direct primary care and high-risk pools, could provide care for people who have already developed pre-existing conditions.

Using a series of targeted alternatives to reduce and then to solve the pre-existing condition problem would prove far preferable than the blunt alternative of one-size-fits-all government regulations that have made coverage unaffordable for millions. However, such a solution would require political will from Republicans—which to date they have unequivocally lacked.

Problem 5: Republicans’ Alternative Is Socialized Medicine

Instead of promoting those better policies, House Republican leaders would like to cave in the most efficient manner possible. During the first day of Congress, they offered a procedural motion that, had it been adopted, would have instructed the relevant committees of jurisdiction to report legislation that:

(1) Guarantees no American citizen can be denied health insurance coverage as the result of a previous illness or health status; and (2) Guarantees no American citizen can be charged higher premiums or cost sharing as the result of a previous illness or health status, thus ensuring affordable health coverage for those with pre-existing conditions.

Guaranteeing that everyone gets charged the same price for health care? I believe that’s called socialism—and socialized medicine.

Their position makes it very ironic that the same Republican committee leaders are pushing for hearings on Democrats’ single-payer legislation. It’s a bit rich to endorse one form of socialism, only to denounce another form as something that will destroy the country. (Of course, Republican leaders will only take that position unless and until a single-payer bill passes, at which point they will likely try to embrace it themselves.)
Problem 6: Health Care Isn’t Going Away As An Issue

The federal debt this month passed $22 trillion, and continues to rise. Most of our long-term government deficits arise from health care—the ongoing retirement of the baby boomers, and our corresponding obligations to Medicare, Medicaid, and now Obamacare.

Any Republican who cares about a strong national defense, or keeping tax rates low—concerns most Republicans embrace—should care about, and take an active interest in, health care and health policy. Given his comments about not repealing, or even talking about, Obamacare, McCarthy apparently does not.

But unsustainable trends are, in the long run, unsustainable. At some point in the not-too-distant future, skyrocketing spending on health care will mean that McCarthy will have to care—as will President Trump, and the Democrats who have gone out of their way to avoid talking about Medicare’s sizable financial woes. Here’s hoping that by that point, McCarthy and Republican leaders will have a more coherent—and conservative—policy than total surrender to the left.

http://thefederalist.com/2019/...ders-still-dont-get/

When Linda Lingle was running for the Senate in Hawaii, I had a conversation with her about the preexisting conditions conundrum. She showed the same lack of understanding of the moral hazard of "covering" preexisting conditions noted in this article.
Before the Dems destroyed the health care market with Obamacare, Health Savings Accounts were increasing in popularity as a way of introducing personal responsibility into the health care decision market.
Of course, Obamacare basically made them illegal, as it did catastrophic coverage. Once you did that, of course people would insist on "preexisting condition coverage".
Disclosure: our own children wouldn't be able to buy individual health care insurance on their own; at least one only got insurance due to Obamacare.

quote:

Before the Dems destroyed the health care market with Obamacare, Health Savings Accounts were increasing in popularity as a way of introducing personal responsibility into the health care decision market.

Which is exactly what we need.
Give people an incentive to shop a bit. Not in an emergency, but for routine stuff. Insurance should really just be for catastrophes, like fire insurance on your house.

Instead, we are on the road to socialism because Republicans didn't want to change course when they had the opportunity.

I get why we shouldn't force insurance companies to sell Uncle Joe a policy when he is calling from the back of an ambulance, but I don't trust insurance companies to not expand the definitions of "pre-existing" to ridiculous levels.

Should a person be put in a high risk pool because the ratcheting down of guidelines for blood pressure, cholesterol, etc moved them into a pre-something category? How about detecting some genetic marker in the family history that is shown to place you at increased risk for some disease. Your brother sends in a sample to Ancestry.com and suddenly you find you can't renew your policy without going in a high risk pool.

quote:

I don't trust insurance companies

Which is exactly why the insurance company shouldn't be the middle man on every interaction with a doctor.

People have an insurance card and think of it as a no-limits credit card for health care.
Instead, insurance ought to be used rarely, for catastrophes. For the majority of our health care, we ought to pay the doctor, out of our own pocket, like any other goods or services.

It's amazing how well the free market works, and yet we would rather have an insurance company or a government bureaucrat in between us and our doctors. It makes no sense.

^^^^^

Agree 100%

Today's "insurance" is more like pre-paid care with a big chunk taken out between the patient and doctor. Ridiculous.

quote:

There is no such thing as a free market...

There hasn't been a free market in health care since WWII and wage and price controls.

Yup, true free market solutions would result in an outstanding system with tons of options and way lower costs.

Tax deductible FSAs, competition across state lines, plans ranging from covers everything under the sun to catastrophic.

quote:

Originally posted by Strambo:
Yup, true free market solutions would result in an outstanding system with tons of options and way lower costs.

Tax deductible FSAs, competition across state lines, plans ranging from covers everything under the sun to catastrophic.

True. If only the government would get their grubby fucking mitts out of it.

Well...we can dream.

You may not trust insurance companies, but you can sue them, unlike the federal government.