I hope you don't mind a long answer, and maybe one that is too personal, but I'm going to address that argument. Disease is fundamentally different from an auto accident. At some point in life, most of us develop a condition that will predictably cost a large amount of money, quite possible for the rest of our lives, but we have no way of knowing when that day will come. For some it comes at birth, for others later. I agree that I shouldn't be able to wait until I'm sick to buy health insurance. That was what the mandate was about. If the Supreme Court had struck down the mandate and kept the rest of the act, the result would have been like saying you could walk into State Farm after wrecking your car.Sloop wrote:I struggle with trying to deem this a good thing. After all, we are talking about Insurance Companies -- not some Government Handout Company. How does the "pre-existing mandate" differ from the guy who wrecks his car and then walks into a State Farm Insurance office and demands coverage -- for the same price btw as the long time SF customer who has never filed a claim? Should not United Health Care be treated the same as State Farm in terms of how they can sell their wares? They are both PRIVATE enterprises.PST wrote:The relevant language is in section 1201 of the PPACA. The act not only prohibits denial of coverage or exclusion of coverage for pre-existing condition, but also premium discrimination based on pre-existing conditions. It imposes "community rating," so that premiums don't necessarily have to be the same in Nebraska as in New York City, but withing each geographic area, they must be uniform. The only factors that can be taken into account are age (within defined limits), family size, and smoking (which can justify up to a 50 percent higher premium).
Anyway, I am sure you have heard this argument before. The fact of the matter is that no insurance company can withstand the onslaught of millions of new customers, all with terrible ailments, and do this without imposing huge increases in premiums. Maybe everyone will be treated the same, but pay they will. ObamaCare was sold to the American public, in part, with the claim that insurance premiums would go down, not up.
But what happens to the person who plays by the rules, makes prudent decisions, and always has health insurance, but who then loses that insurance for economic reasons (like job loss or business failure) and has to go back to the insurance market? If that person has already developed a pre-existing condition, he has no reasonable place to go in the free market. That isn't because insurance companies are evil, just because in a competitive environment no insurance company can afford to provide such coverage if all the others don't. It would attract all the bad risks (a process called adverse selection) and soon would be priced out of the market for average risks.
I am going to use myself as an example here, in part because I am pretty well off: not a one percenter, alas, but lucky in life with nothing to complain about. I am in my late 50s and currently being treated for the second serious cancer of my life. I'm doing well, and I have every reason to think that my initial treatment will succeed, but I face the need for follow-up procedures every three months for years, and the possibility of radical surgery, multiple rounds of chemo, and perhaps lingering hospice care. If my business fails, and I lose my group coverage, how am I like the guy who already wrecked his car? I have had some kind of health insurance literally every day of my life, and as a business owner I help ensure that many other people have it too. There was never any free-market mechanism, however, by which I could insure myself against the risk of becoming uninsurable. If the worst happens economically and medically, I could badly deplete the assets my family will need in the years to come despite having done well in life, because almost no one can afford the full cost of major illness on his own. In addition, the severe illness of a child or other relative who lacked insurance could have a similar effect of pauperizing someone who was both healthy and prudent.
I think the PPACA is especially good for people who have had less good fortune than I, but I think it would be viewed with huge relief as well by most people in my economic position if everyone understood it better and looked at it objectively without thinking about which team they consider themselves to be on or how much they like or dislike its proponents or opponents. Health care simply isn't like most other goods, and few of us possess the means to protect our ourselves and our families from a combination of illness and insurance loss unless a program like this one comes into being. I'm happy to share in the cost.
As one last point, I think Sloop is wrong to believe that there will be an "onslaught of millions of new customers, all with terrible ailments." Most of the newly insured won't have terrible ailments. Most of them will be healthy for years and the insurers will do fine, on balance. Forced to take all comers, each will have its share of poor risks and the burden will be shared. One way or another that happens today. People end up on government programs or getting unreimbursed charity care, and we bear the cost eventually, but the individuals are put through hell first. Likewise, I don't think the PPACA was actually sold on the basis that it will reduce insurance premiums, because no reasonable person expects that. The actual costs of care will keep rising as the population gets older and doctors learn to do more. All we can hope for is to slow their growth.
