Healthcare Reform With Pre-Existing Conditions: Wait 6 Months For Insurance?

The Democrats' healthcare reform bill has been touted as the solution for Americans with pre-existing conditions that make them "uninsurable" in the eyes of private health insurance companies. Normally, underwriters for health insurance plans consider consumers with serious health problems as too high a risk to take on; they profit by collecting premiums while paying as few claims as possible. This has put much of our population in a quandary and helped fuel our current health care crisis. Indeed, it does include a ban on insurers denying coverage based on health status. In addition, it will provide subsidies for those who have been turned down when applying for insurance. Unfortunately, the proposals aren't exactly the panacea promised by the Obama administration and Democratic congresspersons.

It's bad enough that the full healthcare bill, including the requirement to provide people with pre-existing conditions access to health insurance, won't take effect until 2013. From a political standpoint, either its success can't be used to boost President Obama's re-election campaign, or its failure will be the responsibility of someone else if Obama is out of office. Recognizing the need for some immediate help, Congress provided for a high-risk insurance pool--similar to those proposed by Republican John McCain during the 2008 presidential campaign--in the meantime. Over half of the states in America already have high-risk health insurance pools for their residents. It costs them a total of $1 billion to insure about 200,000 patients. Expanding that system on a national level will be difficult.

However important immediate health coverage is, the Senate version has some strings attached. The Senate bill forces patients to wait six months before entering the pool. Medical advocates point out that for many conditions, such as cancer, the afflicted need medical care immediately and can't spend several months without health insurance while hoping they survive long enough to take advantage of the government's pool. The House of Representatives is against such a waiting period, but the Senate claims it's necessary to stop people from dropping their more costly health insurance plans in favor of the government's. The House understands that the healthcare reform bill, already costing over $1 trillion, needs to conserve cash wherever it can while maintaining quality. Instead of requiring a waiting period to enter the high-risk pool, their bill would penalize insurance companies that dump such patients. The health insurance plans guilty of that practice will then have to pay into the government's pool.

In order to cover the one million uninsured Americans with pre-existing conditions, the program would need about $7 to $10 billion per year. The biggest problem with the high-risk pools is that Congress has only budgeted $5 billion for each year of the pool, which will be phased out after the rest of the healthcare reform bill (including the public option) takes effect in 2013. The government could make do with that budget if historical trends hold, with only a small percentage of people taking advantage of the government benefits they are entitled to. It appears that operating on such a belief defeats the purpose of the Democratic legislation in the first place. They want to increase access to healthcare, but are working under the assumption that a significant portion of the people who need the federal high-risk health insurance plan won't sign up? Something doesn't seem right about that.

(Image: Will Palmer under CC 2.0)