What is the mechanism that prevents insurance companies for doing that today? They find out I have cancer and triple my premiums. In fact, pre-ACA, why didn’t insurance companies do that for everybody who had cancer, just triple their insurance premium. They had pre-existing conditions triple their premiums, nobody else is going to insurance them. So how come they didn’t attempt to maximize profits and stick to all the cancer patients.
magnet
4223
Community rating.
In short, there are only a few factors that insurance companies can use to determine their premium for a given policy: age, geographic location, family size, and smoker vs nonsmoker. That’s it.
If your premium goes up, inquire about premium for a hypothetical person who matches your demographics (remember, they can’t ask about your medical history). If it’s not the same, call the feds.
In fact, pre-ACA, why didn’t insurance companies do that for everybody who had cancer, just triple their insurance premium.
Pre-ACA, your employer could work out a contract to cover all employees regardless of health status. Jacking up one employee’s insurance when they got ill would obviously breach the contract.
If you relied on individual insurance instead of employer-based insurance or Medicare, and then got cancer… well then you were SOL. People went bankrupt, lost their homes, etc. And that’s basically the main problem that the ACA was meant to solve.
Nesrie
4224
And you realize prior to ACA a single day lacking coverage still caused a problem right? I don’t know why you’re so against the ACA’s clear regulations against using pre-existing conditions against the insured, but it’s clearly there. Even your documentation doesn’t say what you’re saying… are you reading something different?
Group health plans and issuers may not exclude an individual’s preexisting medical condition from coverage for more than 12 months (18 months for late enrollees) after an individual’s enrollment date.
for more than 12 months. ACA they can’t use it at all.
magnet
4225
Just to clarify, whenever insurance companies are required to provide coverage on demand, regulators have to deal with the problem of moral hazard: if you know you can get insurance at any time, then you won’t get it until are sick.
HIPAA tried to deal with moral hazard by using a blackout period. When you started a new policy, you would have to wait 12 months to receive benefits for an illness you already had when you signed up.
The only way to waive that 12 month blackout period was to declare the pre-existing condition when you got a new policy, and show that it was covered by the previous policy. That gave people a strong incentive to maintain insurance coverage continuously (assuming they knew the rules).
However, this solution led to a new problem: insurance companies had a strong incentive to prove that your “new” condition was actually an undeclared pre-existing condition, and then drop you to avoid paying for treatment, aka “rescission”.
The end result was insurance companies and policyholders constantly accusing each other of cheating. Lots of horror stories. Quite suboptimal.
ACA, in contrast, deals with moral hazard simply by making it illegal: everyone must have a health insurance policy that covers the essentials at all times. That means declaring pre-existing conditions is no longer necessary, and likewise rescission is no longer allowed.
That’s not true.
Insurance rates are approved by state regulators. An insurance company can’t arbitrarily jack up the price of insurance just because you get cancer. If I bought an individual insurance policy last year, and I get cancer this year, then I will the pay the same as any other 56-year-old single non-smoking male, with the same policy
That is true now and it was true pre-ACA. Yes if for some reason, I lost access to that insurance than I was in fact screwed.
I’ve been buying individual insurance policies for 16 years, and probably spent $50K (Hawaii has pretty cheap insurance) but I wouldn’t have spent a dime if it worked like you described.
Yes, insurance companies can and have found ways to drop coverage on individuals, but it is very much the exception, not the rule. ACA has created moral hazard, and I’m taking advantage of it.
Prior to ACA, I was paying around $320 that increased about 5% a year that provide benefits similar to an ACA gold policy except for drugs. After ACA went into effect it jumped to $400. I would have like to just purchased catastrophic insurance, but I was scared if I developed a chronic illness than I’d be hosed since Kaiser didn’t allow you to buy a higher tier policy, and Blue Cross wouldn’t insure me. But since ACA is around, I now pay $170/month for a catastrophic insure. It provides no benefits until I pay $6,800 out of pocket and then 100%. But if I develop a chronic illness, I’ll buy a gold policy since I can’t be turned down for a pre-existing condition. Virtually all of the early-retirees I know are doing the same thing unless they have a chronic disease. Once more people figure this out it is going to bankrupt the system.
Oghier
4227
Setting up a corporate entity is not the “red tape” at issue. It’s getting licensed to sell insurance in a state, which requires compliance with that state’s regulations. That’s precisely the burden the idea seeks to shed. The core is simply, “Let us ignore state regulations but do business there anywhere.” That’s not an approach compatible with state’s rights, or even reality.
I’m all for the “Laboratories of Democracy” approach. It’s one of the strengths of our system. But, again, you can’t use the states as laboratories and simultaneously strip them of the ability to regulate the activities at issue.
I do question the reach of some parts of the ACA. It appears to have too many requirements (e.g., maternity care for men) and it is, perhaps, overly complex. That reflects the fact that half our government decided not to participate in the legislation, hoping that would cause it to fail. It passed anyway, without the benefit of having to compromise with the GOP and that party’s drive to reduce regulatory burdens. We should have a better law than the one we got. But, again, given the GOP’s mandate to avoid working with democrats, it was this or nothing.
Oghier
4228
I don’t know that there is a solution that allows us to give everyone the ability to buy health care and eliminates moral hazard. If you don’t mandate coverage for all, the pools become full of sick people and the insurance companies go under. If you do mandate coverage for all, you must subsidize the poor. And allowing people choice in their coverage allows just the sort of gamesmanship you describe.
It would be awesome to see some genuine, informed debate on this issue in Congress at some point. Seems unlikely.
wahoo
4229
This is a pretty good summary. I’m going to resurrect the whole health care thread and continue discussion there. But what HIPAA did was essentially waive the lookback period if you had continuous coverage. So if there was a 12 month look period, your previous insurance counted and reduced the lookback period to essentially zero.
The ACA has pretty much ended the insurance industry since many insurers no longer protect against risks but just pay costs. Which is why insurance carriers are leaving markets and threatening to leave the exchange.
Shifting future comments to health care thread.
JeffL
4230
This seems to have become an ACA thread.
As for Cruz hiding where his campaign money came from, I never realized Mr. Tea Party was a managing director of Goldman Sachs (on leave.)
Yeah, I’m not seeing this as being much more than a small hiccup for Cruz. I wager it doesn’t survive the weekend in terms of the News Cycle.
He didn’t report it on one of several financial disclosure statements he had to make, but did report it (or at least the cash it generated) on the others.
The whole “Natural Born Citizen” thing is looking to have more legs than I thought it would though… it’s well into “spider crab” territory now.
Lawrence Tribe* was on MSNBC the other night discussing this. I didn’t think the citizen thing was an an issue at all, but Tribe makes the case that it’s complicated. He did offer the observation that when Cruz was his student, he (Cruz) was a consistent originalist - i.e. interpretation of the Constitution based on the founders intent (which to me is nonsense but that’s another issue) but now Cruz is a ‘fair weather’ originalist - he’s one when it suits his agenda (e.g. gay marriage) but not one when it harms him - like is he really a natural born citizen, which from an originalist POV would make Cruz ineligible. (I still think that so long as his mother was an American it doesn’t matter where he was born.)
*I read Tribe for some courses back in college and was a big fan. I no longer am after Tribe signed on with some coal company for reasons I can’t recall at the moment.
Yesterday, the WaPo had a pretty decent article on why (from an Originalist/Legal perspective), he’s not eligible. The author (constitutional law professor) makes a pretty decent case.
The Constitution provides that “No person except a natural born Citizen . . . shall be eligible to the Office of President.” The concept of “natural born” comes from [pre-US revolution British] common law, and it is that law the Supreme Court has said we must turn to for the concept’s definition. On this subject, common law is clear and unambiguous. The 18th-century English jurist William Blackstone, the preeminent authority on it, declared natural-born citizens are “such as are born within the dominions of the crown of England,” while aliens are “such as are born out of it.” The key to this division is the assumption of allegiance to one’s country of birth. The Americans who drafted the Constitution adopted this principle for the United States. James Madison, known as the “father of the Constitution,” stated, “It is an established maxim that birth is a criterion of allegiance. . . . [And] place is the most certain criterion; it is what applies in the United States.”
I actually went into reading the article believing that this was all “Birther” nonsense, but left thinking that maybe he’s got a fight on his hands.
… then George Washington was not a natural born citizen of the US? After all , he was born in English territory. I presume the argument is that the territory became American after the war, so he and everyone else in that situation got grandfathered in. That means the only way for Cruz to make sure he can become President is by leading a conquest of Canada. To arms!!!
wahoo
4236
Makes me laugh. Especially since McCain and others have stuck in some well timed knives. Couldn’t happen to a better guy.
One thing is weird is that I think there’s a sizable venn diagram overlap between bernie sanders folks and Trump folks. They’re both angry populists against free trade, big banks etc.
Timex
4237
Ultimately though, the argument about Ted Cruz’s citizenship is kind of silly I believe. (but I’m not a constitutional scholar or lawyer)
Clearly, Ted Cruz is a citizen of the US. No one disputes this fact.
So then the question becomes whether he is a natural born citizen. If he were not, then that would mean he would have had to have undergone a naturalization process… but he has not.
So at this point, either Ted Cruz is a natural born citizen, or he’s not a citizen at all… and frankly, I think the latter is absurd on its face.
Nesrie
4238
It just doesn’t seem right that two US citizens could go on vacation, their baby come early, and that baby is not considered a natural born citizen under some interpretation of that? That’s just an every day sort of example of course, there are many more.
Your logic only holds true if the situation is binary: either naturalized or natural born citizen. I haven’t looked at the issue closely enough to form an opinion (and frankly don’t care much), but I do think your logic isn’t as air-tight as you think.
I wonder if being “natural born” matters in any other context, other than the presidency.
Oh, lawd. This is the first I’ve heard of this. It’s one of those things that could be innocent and internally consistent – it’s okay for him to say the government should stop bailing out Goldman Sachs and still believe his wife is doing good work on the purely business side of things, if that’s actually the case – but given the laughable revolving door between the federal government and that company, it’s such an eye-roller. How perfectly typical.
Timex
4241
I don’t think we have any other category, do we? I do not believe that there has ever been any mention, in anything, of a citizen who is neither natural born nor naturalized.
