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  • The Sensible Solution for Pre-Existing Condition Exclusions

    The problem of individuals being denied health insurance because of a pre-existing medical condition is frequently cited by defenders of Obamacare as justification for the law, particularly its new insurance regulations and individual mandate.

    In truth, however, the problem is actually much smaller than portrayed, and a sensible solution does not require anything like the massive new spending, taxing, and insurance market takeover included in Obamacare.

    In the group market, where over 90 percent of Americans with private health insurance are enrolled, there are reasonable rules limiting the application and duration of pre-existing condition exclusions. For employment-based coverage, a pre-existing condition exclusion can only be imposed if an individual has less than 12 months of prior coverage. Furthermore any coverage exclusion can be for no more than 12 months—or 18 months if the individual didn’t enroll in the employer plan when first eligible.

    As Heritage’s Ed Haislmaier explains, “Those existing rules represent a fair approach: Individuals who do the right thing (getting and keeping coverage) are rewarded; individuals who do the wrong thing (waiting until they are sick to buy coverage) are penalized.”

    The one problem remaining is in the individual market—which represents less than 10 percent of the total private insurance market—is that the same rules that protect consumers from unreasonable pre-existing condition exclusions in the group market do not currently apply to the individual market. An individual can keep continuous insurance coverage in the individual market for years and still face unjust exclusions when switching plans.

    “The obvious, modest, and sensible reform is to simply apply to the individual health insurance market a set of rules similar to those that already govern the employer group market,” writes Haislmaier. This small reform would ensure protection against unjust pre-existing condition exclusions. Those who maintain continuous insurance coverage would be protected.

    Moreover, Heritage has a plan to help those with pre-existing conditions that have not had continuous health coverage. Haislmaier writes, “The rules should also provide a pathway for those who have not always maintained coverage in the past to earn the same right to obtain coverage on more favorable terms in the future.”

    But instead of implementing these basic reforms for the relatively few individuals that need them, Obamacare creates and enforces sweeping new insurance rules that prohibit applying pre-existing conditions exclusions under any circumstance. Furthermore, if individuals wait to sign up for coverage until they’re sick, Obamacare bars insurance companies from charging them higher premiums.

    It sends the wrong message, particularly to the young and healthy. Under these Obamacare rules, there is no incentive to obtain coverage until they were sick. But with insurers covering only the sick, insurance premiums will soar. To offset this effect, Obamacare included the ever-controversial individual mandate—to force healthy individuals to buy coverage. But this attempt to stop the unraveling will likely fail as well, as the young and healthy choose the penalty over high-priced coverage.

    This is yet another example of the mess that is Obamacare.

    Posted in Obamacare [slideshow_deploy]

    4 Responses to The Sensible Solution for Pre-Existing Condition Exclusions

    1. Bilbo says:

      You are forgetting that the goal is not to insure everyone. It is to put the government in charge and get rid of the insurance companies. That way they can tell you what you can and cannot do or must do in order to be covered. They can say, "well if you eat a cheeseburger once a week, you can not have heart bypass surgery" etc…. I guarantee the insurance companies won't last under these rules. They WILL go out of business. Good luck with the government being in total control of your lives.

    2. Melba Rowland says:

      Great idea…And one other point people should be aware of….Even if you are covered under your place of employment and the policy is written in a state other than the one you live and work in, once you lose that coverage due to exhausting Cobra , you are just out of luck. No insurance is obligated to cover you. Point in case: I worked for almost 30 years as a Nurse in South Carolina, always keeping myself and my ffamily insured through my place of employment. Then I was diagnosed with Breast Cancer and was unable to continue to work. Paid my Cobra preminums until Cobra was exhausted. At that point, thought surely I would be able to get insurance because afterall, I had not had a lapse in coverage in the entire 30 years I worked and I was covered under Blue Cross/Blue Shield (a national company), right? WRONG. My employeer's home office was in Alabama so the policy was written by BCBS of Alabama. I live and worked in South Carolina. BCBS of ALabama told me they were unable to write a policy out of sstate. BCBS of SC told me "NO WAY" they would touch me with preexisting conditions. I was just out of luck until I qualified for Medicare.

      • lmcpepper says:

        In California our state has a plan available at that time- it is ONlY for people who have lost group coverage, exhausted COBRA and then been denied individual coverage. The problem is- most people don't know the rules about this plan and how to become eligible for it.

    3. RBroc says:

      I'm sorry, but this article is complete rubbish. I work in ERs and at hospitals, pre-existing conditions is a huge problem. 1 million people going bankrupt each year in this country related to healthcare bills, part of the problem there is pre-existing condition clauses or other unscrupulous measures to avoid paying health bills. The patients who do best are the ones on medicare or medicaid or at the VA where they are service-connected.
      To say that pre-existing conditions is a small problem is to not understand the problem at all. New columnist please.

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