Friday, October 30, 2009

There Is No Such Thing As Insuring A Pre-Existing Condition

Spelled out nicely by a commenter to the previous article I linked:

Something, I posted a couple days ago on another article; but it applies here, so I'm recycling it:

Insurance for those with "Pre-Existing" Conditions is NOT insurance.

In the ongoing healthcare debate, I have yet to anyone state the obvious in regard to insuring individuals with "pre-existing" conditions. Perhaps out of a fear of seeming harsh or uncaring.

The OBVIOUS that I speak of is that providing health care or health coverage to individuals with "pre-existing" conditions is quite simply NOT INSURANCE. That is, it cannot be defined as Insurance. What those with "pre-existing" conditions receive is called WELFARE. In this instance, it is welfare provided by a private company in the free market and subsidized by other consumers.

Allow me to provide a very basic description of what insurance IS, and what it IS NOT. Insurance is a privately provided service whereby the provider offers to pay for catastrophic occurrences that befall the buyer in exchange for regular payments. That is, you pay premiums, and IF you get sick the insurer will pay your expenses. The pay-out by the Insurer has the potential to exceed the sum of the Insured's payments. This is the same way that all insurance works.

What Insurance IS NOT, is the payment of expenses for a catastrophic occurrence that has ALREADY occurred, and is ongoing. This is what those with "pre-existing" conditions are demanding when they try to get health insurance.

If you would like a simple proof of this, do the following:

Buy a house. Do not buy Homeowners' Insurance. Wait until your house catches fire. Do not attempt to put out the fire. When your entire house is fully engulfed in flame, call the insurance company. Explain the situation to the Insurance company (that your home is presently burning and cannot be saved). Then, and only then, ask to purchase homeowners' insurance. When they inform you that they cannot give you a policy because your house is currently burning down, explain to them that you have a RIGHT to homeowners' insurance.

You cannot do this, because once your house has burned down, there is nothing to insure. Likewise, once your health has failed, and you have what is called a "Pre-Existing" condition, you no longer have anything to insure. It is your SOUND health that is insured (ensured) by health insurance. If it were your "Pre-Existing" condition that was insured, they would call it "Illness Insurance", not health insurance. Try getting a car insurance company to pay you for a "pre-existing" collision.

Only Health Insurers are asked to pay the expenses of those who have already have a claim and who have not paid any premiums. In any other situations this is known as a GIFT. This particular gift is paid for by other policy-holders.

The only alternatives to the present situation in regard to individuals with "pre-existing" conditions are:
1. Deny "insurance" to anyone with a "pre-existing" condition; or,
2. Provide coverage for "pre-existing" conditions through government managed welfare.

The latter would pay for those expenses related to the "Pre-Existing" condition, and leave those with such conditions to purchase private health insurance to cover all other medical expenses. This would put individuals with "pre-existing" conditions on the same footing as healthy individuals when buying health insurance for care not related to their "pre-existing" condition. That is, with something to actually INSURE.

One way or another, however, the healthy will be paying the medical expenses of those with "pre-existing" conditions. Personally, I would prefer having this administered by the free market (as it is today). However, in today's America, The People seem less concerned with having their money TAKEN via taxation and redistributed by the Government, than they are with voluntarily paying a lesser cost through the efficiency of the free market. [I think I sense an argument against the "witholding" of taxes here]

Lastly, in the interests of "Full Disclosure", I have a "Pre-Existing" condition.

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