There is No Hope - This Country is DONE!

[Michael Rossi]

I've sadly come to the conclusion that our country is done, over, kaput! I finally came to this conclusion over the weekend as we were circulating petitions to put a Constitutional Amendment on the November ballot in Ohio to stop Obamacare. As you know, I live in Ohio and in a somewhat rural area. This should be prime territory for conservatives. I was SHOCKED at the number of people that wanted Obamacare and many of these people should have known better. I heard comments like "now my son will have free insurance". It was absolutely apparent that these people think that Obamacare is free and comes from Obama's magical stash. They are too STUPID to understand that someone must pay for this stuff and there are a LOT of these people.

Therefore, I'm sorry to report that the USA as we've know it is OVER!

[Vikram C.]

While I am not a fan of government subsidies, I do need to point out that pre-existing conditions are not analagous to getting car insurance after an accident.

Insurance is designed to transfer the risk of uncertainty in return for a fee - the premium. Once you have a car accident, there is little uncertainty over its costs (unless it is one of those rare accidents that results in a large lawsuit). It is therefore not insurable in the economic sense of the word.

Pre-existing conditions are different in a couple of ways. First, everyone is going to have some health condition at some point in their lives that would become "pre-existing" from that point onwards and therefore is not like an avoidable accident. Second, even after you have a health condition, there is a wide range of expenses that you can incur related to it. (For example, you could have hypertension and die of something else with no unusual expense related to your hypertension.) Therefore, pre-existing conditions do make sense for insurance coverage.

The reason why insurance companies have traditionally avoided covering pre-existing conditions is not related to their inappropriateness for coverage but to something called "adverse selection." This refers to the risk of the first insurance company that covers a particular risk ending up with all the people who have that condition, thus driving up its costs and premiums, and then losing all its healthy patients due to the high premiums, consequently necessitating it to raise premiums again, etc. This vicious cycle can continue until the insurance company goes out of business.

That's why insurance companies try to have a "healthier" patient base than their competitors and this also, unfortunately, creates a cycle of each company trying to have a healthier base than its competitors, thereby making insurance harder and harder to get for everyone. That's the situation we were in and a simple solution to eliminate the race to the bottom AND the problem of adverse selection is to pass a law preventing insurance companies from denying someone based on a prre-existing condition.

Insurance companies are actually quite happy with the rule that does not allow them to deny patients based on pre-existing conditions because it increases their revenues and profits. It makes perfect actuarial sense to them. The problem that I have with Obama's health care plan is that it does not do much to address the primary health care problem in this country, which is that costs have gone out of control due to a variety of market distortions.