21 July 2009

Pre-existing Conditions and ObamaCare

Saw this interesting article from the LA Times:

Organ donors run risk of being denied health insurance
Eight years ago, Los Angeles resident Patricia Abdullah decided to donate a kidney to an acquaintance. She calls it one of the proudest moments of her life.

Now she wonders what will happen if she can't find another job with group coverage. If she turns to the individual insurance market, will her act of compassion as an organ donor be perceived by insurers as a "preexisting condition," resulting in higher premiums or even denial of coverage?
There was a dialogue on NPR with some expert about how this was unfair and wrong, but it made me think, and I don't entirely agree.   Under the current set of rules, if (and I stress the if) there is an actuarially-measurable risk related to prior kidney donation, it makes sense and is fair for insurers to price that into an individually underwritten policy.  Why wouldn't they?  Sure, you don't want to punish people for being altruistic, but Blue Cross shouldn't have to bear the responsibility for their insured's altruism.  Maybe the transplant center or Medicare or someone should cover the costs down the road.  I don't know.

But that got me reflecting on the notion of "pre-existing conditions" and then I read KevinMD's surprising and bold endorsement of the proposed ObamaCare:
[W]hat if reform doesn’t pass? It’s quite possible that preserving the status quo will be far worse for doctors going foward than the current proposals. I also believe that it’s important for doctors to “get a seat” at the table, lest they be marginalized further if they don’t.

I cited a quote from Paul Krugman a few months ago, where he wrote something along the lines of, “the perfect is the enemy of the good.” He was referring to the single-payer supporters and grassroot reformers who felt that Congress’ proposals didn’t tilt enough to the left, and as such, oppose the current efforts.

I think that sentiment goes both ways. Some reform is better than none, and doctors advocating for a free market-based system shouldn’t hold out, hoping for the perfect package.

It’s not coming anytime soon.
This also sparked some reflection on my part.  As the political wars have heated up, I've gotten deeper into the policy weeds especially with regard to the public insurance option, which has become the flash point between right and left. But here's a little perspective: if we lost the public option, but got the rest of the package, how would the reforms look?

The answer is: pretty good. 

Even absent the public option, the House and Senate HELP bills read like a wish list for liberals:
  • Regulation of the individual and small group insurance market via a National Insurance Exchange
  • Guaranteed issue (prohibits insurers from excluding people with pre-existing conditions)
  • Community rating (prohibits ratcheting up the fees for those with pre-existing conditions)
  • No recissions (prohibits insurers from rescinding the policies of people who become sick)
  • Universal coverage via an individual mandate
  • "Pay or play" employer madates to fund subsidies and encourage retention of employer-based coverage
  • Sliding scale subsidies for those too rich for Medicaid but unable to afford insurance
And there's more, like the elimination of the SGR and the bonus payments for primary care.   If that's "all" we could accomplish in this reform year, then it would still be a big win.  And the great thing is that these key planks are now accepted by all major players as "done deals", and are assumed to be part of the final legislation.  The only points of contention remaining are the public insurance plan and the mode of financing.

Don't get me wrong: I still think a public insurance plan is a good idea and a critical element to include.  It will make the cost of reform go down, no question about it.  If we are going to "bend the curve" and try to rein in the escalating costs of health care, a public plan is necessary.  There are also some gaps that need to be filled, like the IMAC proposal, which might also help control costs.  So we are not done, and I hope Obama and the Democrats are able to keep the pressure on, hold their caucus together, and get a final bill passed with a mid-range public option intact.  It won't be easy, but we are on track and in as good a position as we could hope for at this point (albeit behind schedule).



5 comments:

  1. But Blue Cross wouldn't bear the costs of organ donors' altruism. Rather, they would pass the costs on to all of their insured in the form of slightly higher premiums for everybody.

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  2. ...the House and Senate HELP bills read like a wish list for liberals

    Liberals apparently are not interested in dealing with the real problem of health care and, in fact, seem to want to amplify it: that is that to the patient it appears that someone else is paying...so s/he doesn't care what it costs. All of the points you list above compound this problem.

    Joe: Yes, that would be the case under the proposed legislation.

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  3. I have enjoyed reading your blog, but I have a question about health care reform. Namely, why do we have to do it all at once.

    There are individual pieces that are low cost, small, that could be implemented right away. Each one would have a measurable impact. As we evaluate their effectiveness, we could throw out the ones that didn't work the way we wanted and keep the ones that do.

    For example, the Insurance Commissions for the various States across the country have blocked a lot of health insurance reform over the years because Federal Regulation would preempt their State regulation and dilute their power.

    Some simple ideas

    1. State laws mandating headquarter locations of insurance companies are illegal(For example, if you do not have your company headquarters in the State of New York, you can't sell insurance there)
    2. Allow small businesses to join together to purchase health insurance. Allows for bigger groups
    3. Regulate Insurance Plans and Rates at the Federal Level. Allows large companies to have one policy that covers all of their employees, instead of 50 separate plans
    4. Community Rating System for Insurance - insurance rates based on the US population as a whole.
    5. Elimination of Medical History Underwriting - removes pre-existing condition for the equation, Age/Sex only allowable modifiers of rate. Since rates would be based on US population as a whole, costs for medical conditions would be built into the rates.

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  4. Steve, may I bear your children, please???

    Pattie, RN

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  5. Steve,

    You, too, are missing the point. That insurance is all about diffusing the risk (i.e. the cost) of health problems across a large population. When the cost of any significant health problem far exceeds the ability of an individual to pay for it, the costs must be spread out.

    To put it another way, risk pooling is a feature, not a bug!

    Don,

    The biggest reason for comprehensive reform is because it's hard to do politically, and we may only get one shot at this. Incrementalism has been the mode since 1965 and it has not worked. We have a shot at system-wide reform NOW, and we can't afford to let it go to waste.

    ReplyDelete