Op-ed: The shortage of pre-existing state safety may cripple many Individuals financially
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Health insurance and expense are paramount this election year, and one of the loudest arguments between Republicans and Democrats is that they protect people with pre-existing medical conditions.
What does this really mean and why is it so important to your personal finances?
According to a 2019 study by the Kaiser Family Foundation, an estimated 27% of adults ages 18 to 64 in the United States have a pre-existing condition. In addition, approximately 133 million Americans who are not eligible for Medicare have health problems that could make them uninsurable if there is no protection for pre-existing medical conditions. That’s more than a third of the population.
In reality, very few people remain perfectly healthy until the age of 65. Hence, at some point you are likely to develop a health condition that is believed to be pre-existing and that can cause health insurance problems.
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The majority of people under 65 years of age have employer-based health insurance coverage, so they may not think they are covered by comprehensive coverage. But as we saw during the pandemic, job losses are unpredictable.
Even if you have the financial means to opt for expensive Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance after losing your job, this coverage is only valid for 18 months. You would then have to take out insurance individually. In this case, health insurance protection becomes very important.
In addition, many people are self-employed or work for small employers – these groups do not have the same protection as people who work for large companies. The lack of protection will significantly increase the cost of health insurance for small businesses dealing with people with health problems. This would lead to discrimination against unhealthy people in the workplace, making it even more difficult for them to get affordable coverage.
With health care costs skyrocketing, common chronic diseases like diabetes and asthma can be financially crippling for individuals.
If you find yourself in an unfortunate camp of people suffering from heart disease, cancer, or an autoimmune disease like rheumatoid arthritis, with good coverage you could lose your job and go bankrupt. The ability to get affordable health insurance regardless of illness can be critical to your financial well-being, even if you work for a large company.
Every politician lately seems to be saying that they will fight to protect people with pre-existing health conditions. To show you which are telling the truth, it is important to ask if your proposal meets all of the conditions necessary to provide coverage at an affordable price to everyone, including healthy people and people with medical conditions.
The 3 most important requirements for coverage
What is required to protect existing conditions? There are three requirements:
- Insurance companies would have to issue insurance to every applicant regardless of their health or health factors.
- You cannot base the cost of insurance on health or other health-related factors, and;
- You cannot refuse to pay for essential health benefits.
What are the proposals of various politicians and where do they fall on these terms?
The American Health Care Act of 2017, issued by the Republicans, met the requirement of having insurance for everyone, but allowed policies to be priced based on health. According to the Center for American Progress, a person with metastatic cancer would pay about $ 140,000 more per year than a healthy person. Even straightforward diabetes would add an additional $ 5,500 per year to premiums.
The bill included high-risk pools to cover people with extremely high premiums, but insufficient funding to meet needs. Prior to the Affordable Care Act, high-risk pools were used in many states. High risk pool insurance was expensive, had inferior benefits, and funding depended on the whims of elected leaders. This is the main reason why high risk pools don’t work.
Current bills presented by Republicans in Congress would require coverage but would allow pricing based on health or health proxy factors, or would not force insurance companies to provide basic coverage. What good is a policy if you have cancer and the policy restricts cancer treatment?
The ACA fulfills all requirements for covering existing conditions.
One problem with the ACA is that the cost of premiums has increased for everyone, including those who do not have ACA coverage, making coverage unaffordable for many. This is because many of the ACA’s cost-cutting provisions have not been effectively implemented, such as the reform of fee payments and the rebuilding of universal services.
So where do we go from here to get the health system we need and to protect people with pre-existing health conditions?
Instead of starting over with new laws, the best way is to fix what we have – this is what Congress has done in the past for all major laws. Ideally, politicians need to work together to fix the health system. And that means finding ways to cut costs for American families.
In the meantime, we need to hold policymakers accountable and ensure that the state of affairs that already exists is in place for all of us.
– By Carolyn McClanahan, MD, director of financial planning at Life Planning Partners