The Pre-Existing Elephant in the Room
By David Henderson
When Republicans advocate, and have advocated, delaying or even ending the individual mandate to buy health insurance, I am, and have been, with them. I don’t like the government initiating force against people.
But no one should kid himself that if the Republicans succeeded, that would be a major victory over ObamaCare. Because the elephant in the room is ObamaCare’s ban, in the individual insurance market, on charging health insurance premiums to people that reflect their risk. The specific risk not allowed to be priced is “pre-existing conditions.” Enforcing this ban, which I’m confident that Obama will be able to do, essentially removes much of the insurance element from insurance. It makes no more sense than requiring that life insurance companies charge the same rate to someone who has cancer as to someone who does not.
It’s this ban on pricing for pre-existing conditions that likely explains the sticker shock that so many people who buy individual insurance have suffered in the last few weeks. See here for one instance. It’s this ban that should have told everyone right away that Obama’s extravagant claim, “If you like your insurance, you can keep it,” had to be wrong.
So even in the extreme case that the Republicans succeed in delaying or ending the individual mandate, even in the extreme case that they also delay more than Obama has done, or even end, the employer mandate, even in the extreme case that the Republicans do both of these plus rein in or end the huge subsidies for individuals to buy insurance, much of the damage of ObamaCare is done. By preventing insurance companies from pricing for pre-existing conditions, Obama has almost destroyed the market for individual insurance. He has taken one of the few parts of the health care that worked pretty well–the market for individual insurance–and badly wounded it. Unless this part of ObamaCare is repealed, we will still have a mess on our hands.