Saturday, May 6, 2017
The Pre-Ex Mantra Is A Fraud
Betsy McCaughey: The Democrats' Pre-Existing Condition Scam
The House vote on the GOP's ObamaCare repeal bill vote is down to the
wire, with dozens of Republicans waffling as "undecideds." What's the
hold-up? Ninety-six percent of people who have to buy their own
insurance stand to benefit from this bill, which will likely drive down
premiums by double digits.
The remaining 4% — those with pre-existing conditions — will be protected
by a federal fund to subsidize their insurance costs. They won't get priced
out of the market, because the fund will pay the lion's share of their
But some Republicans are
running scared. Although the bill
solves two problems — lowering
premiums and protecting people
with pre-existing conditions —
these fence sitters are worried
about something else — getting
As a member of the New York delegation put it, the issue is "optics."
They're cowed by the media's false reports that the GOP is abandoning
people with pre-existing conditions.
In fact, no one wants to do that. There is a consensus that people with
pre-existing conditions should be able to get insurance. The issue is
who pays the hefty price tag. ObamaCare forced healthy buyers in the
individual market to foot the entire bill. That's why their premiums have
doubled since the law went into effect.
The new House bill sets up a fairer way: a $130 billion pot of money,
federally funded, to pay for people with pre-existing conditions. The
entire nation chips in, not just people stuck in the individual market.
Under ObamaCare, the healthy and the chronically ill paid the same
premiums. It's called community pricing. Healthy people would never
meet their sky-high deductibles. Instead the premiums extorted from
them would be used to cover huge medical bills for the chronically ill,
who consume 10 times as much medical care.
In fact, Aetna CEO Mark Bertolini reports that less than 5 percent of
ObamaCare enrollees consume over half of the health care.
Most healthy people saw that being charged the same as these sick
people was fundamentally unfair and refused to sign up.
The GOP bill offers a solution. States can choose to get a waiver from
ObamaCare's community pricing rule, so that insurers can sell to
healthy people at a far lower cost. States that get the waiver should
see double-digit premium decreases for the healthy almost immediately.
ObamaCare's community pricing was the single biggest reason premiums
have doubled since 2013, according to actuarial consultants at Milliman.
Naysayers claim the federal fund to subsidize people with pre-existing
conditions won't be adequate. Nonsense.
How many people will need help? Not as many as Democrats claim.
Before ObamaCare, 250,000 people a year with pre-existing conditions
were denied coverage for health reasons by major insurers. In 2010, when
the ACA established a temporary program for people not being served by
state high-risk programs, another 115,000 got help. Adding the two figures
together, count on 365,000 people to need help paying for their premiums
because of their medical histories. To be safe, call it 400,000.
Based on the $32,000 per person the ACA's temporary program spent
insuring people with pre-existing conditions, the federal fund will need
$128 billion a year. So the $130 billion a year the GOP bill provides is
New York, New Jersey and several other states ruined their individual
insurance markets two decades ago by imposing community pricing,
which drove out healthy buyers. Lawmakers in those states would be
smart to wise up, get a waiver and offer low prices to most buyers. But
don't count on it, at least not in New York.
But several states — Alaska, Minnesota, Idaho and Oklahoma among
them — have already acted, without waiting for Congress. They used
state funds to help cover the sickest people, and relieve pressure on
healthy premium payers. Alaska averted a 40 percent premium hike
that way last year.
To summarize: The funding is adequate and the approach works.
Spineless politicians whining about "optics" should look in the mirror.
What's they're really missing is backbone.
McCaughey is chairman of the Committee to Reduce Infection Deaths.