Medical Economics

Pre-Existing Conditions And Individual Mandates

The Affordable Care Act is the piece of legislation that Americans simultaneously both love and hate. Americans love not being excluded from health insurance if they have pre-existing conditions but hate being forced to buy health insurance if they don’t want to. And so, there has been an effort to eliminate the individual mandate to buy insurance while preserving the the inability of insurance companies to deny coverage for pre-existing conditions. I think this is a great idea – every body wins… right?

Just think, now you can wait until you get sick before you have to buy health insurance! You can go for years without paying insurance premiums and then when your knee finally starts to give out, you can buy health insurance that year and get a knee replacement and then charge it to Blue Cross. While you’re at it, you can go ahead and get your screening colonoscopy, your mammogram, your cholesterol check, and your shingles vaccine all in that year while you are covered under your insurance policy. And then at the end of the year, you can opt out of health insurance and then not buy it again until 6 year later when you need the other knee replaced!

This is such a great idea, just think of how well it would work if we applied it to other forms of insurance:

Life Insurance. Americans will be delighted to not have to buy life insurance until they are already dead. Gone will be all of those years of having to pay life insurance premiums when you don’t die. Death is the ultimate pre-existing condition. This will save the average person tens of thousands of dollars in premiums over their lifetime.

Automobile Insurance. The average American pays $1,400 per year for car insurance. By not having to buy automobile insurance until you actually have a car wreck, we can now spend that $1,400 every year buying consumable goods and we will put our nation’s economy into hyperdrive. The average person is involved in 3 – 4 car accidents during their lifetime so that means that we would only have to buy automobile insurance for three or four years. And if you couple that with our new plan for life insurance, you can save twice as much by not having to buy either one until you are in a fatal car wreck!

Malpractice Insurance. Here in Ohio, internists pay an average of $14,00 per year for medical malpractice insurance. In New York City, it costs the same internist $36,000. And if you are an obstetrician in New York City, it will cost you $215,000 per year for malpractice insurance. By applying the same principle of pre-existing condition and individual mandates to doctors, we would no longer have to buy malpractice insurance until we are actually sued.

Umbrella Insurance. Every physician should have an umbrella insurance policy. Doctors have a big red bull’s eye painted on their backs that every personal injury attorney in the country can see. And so most physicians have a $1 million umbrella insurance in case one of those personal injury attorneys’ clients slips and falls on the physician’s driveway or is involved in a car accident with the physician. With this new insurance principle, doctors all across America can stop shoveling the snow from their sidewalks and if some pedestrian slips and breaks their hip, the the doctor can call his insurance agent and buy a quick $200,000 umbrella policy. If that pedestrian falls and breaks both hips, then you can buy a $400,000 umbrella policy.

Disability Insurance. Just about all physicians younger than age 55 need to buy disability insurance. But by eliminating the pre-existing condition & individual mandate requirements, we would no longer need to buy disability insurance until we are actually disabled.

Travel Insurance. No one really thinks that they are going to be in a plane crash. So I have a great idea – an app for your phone for travel insurance. Let’s face it, you don’t really need travel insurance if you actually get to your vacation destination. But with the new travel insurance app, if you hear your pilot say over the intercom, “Brace for impact”, in just seconds, you can open your app and buy travel insurance, before your plane actually crashes!

The way you keep health insurance premiums down is by selling it to as many healthy people as possible – it is the fundamental basis of actuarial science. If the only people who have to buy health insurance are those who are already sick or likely to become sick, then premiums will skyrocket. You can’t have the pre-existing condition clause without some element of an individual mandate.

November 13, 2018

By James Allen, MD

I am a Professor Emeritus of Internal Medicine at the Ohio State University and former Medical Director of Ohio State University East Hospital