Chapter 2 of The Great Experiment
Confronting pre-existing condition problems (real and imagined)
- The problem of coverage for pre-existing conditions remains relatively small and limited to the individual health insurance market, despite exaggerated claims used to advance passage of the Affordable Care Act. Nevertheless, too many people still remained at risk of falling through the cracks of protective measures provided by HIPAA, COBRA, and state-run high risk pools.
- Moving to true insurance portability will require fundamental reform of the tax treatment of health insurance and reworking of insurance regulations, information disclosure practices, and insurers’ business models.
- In the nearer term, we should consider discarding the ACA’s approach to coverage of pre-existing health conditions (which relies on sweeping regulations and new entitlements) and replace it with a system of robust, well-funded high-risk pools
- Temporary high-risk pool coverage provided under the ACA was poorly designed and is likely to aggravate, rather than relieve, problems in access to care faced by states and high-risk patients. Its rules were a significant departure from the practices of previous state-based high-risk pools.
- True high-risk pools should be limited to covering the most likely, highest-risk individuals who are identified before the fact of enrollment.
- Americans who stay in continuous insurance coverage should not be penalized for developing costly health conditions. Premiums charged to any other high-risk customers should be capped at some fixed percentage above applicable standard rates (regardless of income), with taxpayers funding the difference. Supplemental sliding-scale subsidies to the poor also should be provided by state and federal taxpayers.
- Initial funding for more effective high-risk pools will have to come from federal taxpayers in the form of modestly generous, but capped, annual appropriations. A switch to state matching funds should be reconsidered in later years.
- Operating rules for the high-risk pools should prevent participating private insurers from dumping unwanted, but not truly high-risk, customers in the public-subsidy system.
- Solving the problem of covering Americans with pre-existing conditions does not require a massive transformation of their health care system.
More information about The Great Experiment is available here.