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Pre-existing conditions protection vs The Insurance Companies

Pre-existing conditions protection vs The Insurance Companies

Mitt Romney has changed positions several times on what he would do about Obamacare (Afforable Care Act) if elected, but what he said on Meet the Press this week was that he supports repealing parts of it and replacing them with other things. Now, for the record, this is contradictory to his stated support for Issues on his website which explicitly says he supports a "full repeal" of Obamacare which would be replaced by 50 individual state health care reforms... but for the moment, let's ignore that Romney can't keep his own positions straight and we'll focus on what he said on Meet the Press.

I would like to focus on two things in Obamacare, one that Romney says he supports and one he doesn't.

The protection for Pre-existing Conditions and the Individual Mandate.

Romney says he supports the Pre-existing Conditions protections in Obamacare which prevent Insurance companies from denying you or charging you higher premiums because you have a pre-existing condition. It's an excellent provision of the law and we apparently all agree on this one. Bully for us. (or does he? read on)

Now the Individual Mandate... The New York Times did a fact check on a DNC web ad relating to Romney and the Individual Mandate. They found that Romney would NOT support a federal individual mandate:

Romney’s full response, in fact, was consistent with his position throughout his unsuccessful run for the 2008 GOP presidential nomination — that he would not impose a federal mandate. He made this policy clear in a 2007 speech to the Florida Medical Association, which was his most comprehensive and definitive statement on health care during that campaign.

The fact checkers at the NYT agree that Romney's plan is to use 50 different state health plans, which matches up with Romney's website.

Here's the problem with these two positions: YOU CAN'T PROTECT THOSE WITH PRE-EXISTING CONDITIONS AND NOT HAVE A MANDATE.

The entire reason for needing an individual mandate is because of pre-existing conditions protections! This is how Insurance companies work: Lots of people toss small amounts of money into the pool. A small number of those people then pull money out (more than they put in) in order to cover their losses. Health insurance, car insurance, Earthquake insurance, etc. They all work this way. In fact, let's talk about Earthquake insurance for a moment. This used to be very popular in California.. and then we had a major earthquake which destroyed many, many homes and many, many people all showed up to take money out of the pool... and there wasn't enough in the pool. That's the core requirement for risk-pool insurance. It only works if a small portion of the people are drawing from it at once. 

So, back to Health insurance. Let's say I don't have insurance. I get sick. My illness is going to cost me $20,000. I call up the insurance company to get insurance at $500/month so that I can have a low, low deductible. They can't deny me because I have a pre-existing condition. I pay $500 for my premium this month, plus $500 deductible, and the insurance company now pays for the rest of the $20,000 treatment I need. I'm all fixed up now and so I cancel my insurance after one month. 

Do you see the problem?

You cannot have protections for pre-existing conditions without a mandate. It would destroy the insurance companies to do so because it would topple the entire fashion that insurance works. In order to protect for pre-existing conditions there needs to be a larger pool of people paying into the system every month... and that's where the mandate comes in.

Romney knows this, he understands this because it was part of Romneycare and he's not a stupid person. He understands how the system works and why these two items go together.

So, when he says he'll repeal the mandate but he'll keep the protections for pre-existing conditions.. he's lying. He can't do both.

The truth is that he's lying when he says he'll do both. Mitt Romney's website says he'll (emphasis mine):

Prevent discrimination against individuals with pre-existing conditions who maintain continuous coverage

Notice that bold part? If you ALREADY have insurance and you never let it lapse, then you'll be able to switch from one insurance company to the other and the new one can't deny you. That's VERY different than what Obamacare does. The difference is that all of the people who have been unable to get insurance in the first place, due to the fact that insurance companies can deny you, will still not be able to get coverage!

When Mitt Romney says he supports the Pre-existing Conditions protections in Obamacare, he's lying.

 

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