Now that the House of Representatives has passed a healthcare bill and forwarded it to the U.S. Senate, there is a lot of talk about the effect of pre-existing conditions on future individual health care costs.
Why? Because of the MacArthur Amendment which, with some tweaking, was retained in the final bill. Here's a summary:
Rep. Tom MacArthur, R-New Jersey, wrote the new language on pre-existing conditions in the current iteration of the GOP health care bill as part of his eponymous amendment to the current legislation. A legislative summary declares, "Nothing in this Act shall be construed as permitting health insurance issuers to limit access to health coverage for individuals with preexisting conditions."...
Under the new Republican bill, states have the ability to apply for three different waivers from regulations under Obamacare if they can prove that doing so will reduce average premiums, increase enrollment, stabilize the health insurance coverage market or increase the choice of health plans in the state. One of those waivers applies to pre-existing conditions, allowing insurers to use "health status" -- that is, current health, health history and other risk factors -- to set insurance premiums.
While the MacArthur Amendment expressly forbids insurers from turning down people with pre-existing conditions, they could, based on your health status, "offer you a policy that could end up charging you thousands," said Karen Pollitz, Senior Fellow with the Kaiser Family Foundation.
So how many people could have their insurance rates jacked up due to pre-existing conditions? Well, last year the Kaiser Family Foundation addressed that:
Before private insurance market rules in the Affordable Care Act (ACA) took effect in 2014, health insurance sold in the individual market in most states was medically underwritten. That means insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage....
We estimate that 27% of adult Americans under the age of 65 have health conditions that would likely leave them uninsurable if they applied for individual market coverage under pre-ACA underwriting practices that existed in nearly all states. While a large share of this group has coverage through an employer or public coverage where they do not face medical underwriting, these estimates quantify how many people could be ineligible for individual market insurance under pre-ACA practices if they were to ever lose this coverage....
At any given time, the vast majority of these approximately 52 million people with declinable pre-existing conditions have coverage through an employer or through public programs like Medicaid.
So some people are drawing the conclusion that 52 million Americans will have their insurance rates jacked up.
I call bull.
First off, to assume that 52 million people will have their insurance rates jacked up, you have to make two underlying assumptions. First, you have to assume that the insurance companies will decide to jack up rates for every pre-existing condition on this list. Second, you have to assume that every single state will ask for the waivers allowed in the MacArthur Amendment.
This is, on its face, ludicrous. I live in California, and I can state with certainty that the Democratic legislature in California will never allow pregnancy to be treated as a pre-existing condition. And I doubt that any insurance company who does business in California would even think of approaching customers (individuals or corporations) and saying, "If you want to cover newly-hired pregnant employees, that costs extra."
So while it's quite possible that while some states may grant these waivers, not all states will. The populous blue states on the coasts won't go along with this - therefore, while insurance rates could be jacked up for some, they won't necessarily be jacked up for 52 million people. That 52 million figure could be a gross OVERESTIMATE of the number of people affected.
Or is it? Because there's a second factor at work here - another set of "pre-existing conditions." Not pre-existing health conditions, but pre-existing conditions regarding the way that business works.
As I noted earlier today, shareholders and investors are fickle folk. When American Airlines tried to retain talented people by jacking up wages, investors such as Kevin Crissey wailed like hurt children.
If you think that corporations are primarily interested in providing great products and services, you're ignoring what's going on in the corporate world, which is so heavily focused on short-term gains (at least in this country).
The primary goal of corporations is - COST CONTAINMENT. This explains all of the rightsizing and other steps that corporations are taking. It's all an effort to increase short-term gains to make the investors happy.
And, if the House bill were to survive basically intact in the Senate and obtain the President's signature, short-term investors would have a great tool to drive cost containment.
And in closing, I want to assure our shareholders that Megacorp will continue to expand. We will do so due to the talents of our dedicated employees. Now I'll take questions from the floor. Carl?
YES, VIRGINIA, I HAVE A QUESTION REGARDING YOUR EXORBITANT EMPLOYEE COSTS.
AS A SHAREHOLDER WITH A TWO PERCENT STAKE IN THE COMPANY, I AM DISTURBED BY MEGACORP'S LAVISH SPENDING HABITS. MEGACORP ONLY MADE ONE BILLION DOLLARS IN PROFIT THIS YEAR, WHERE IT EASILY COULD HAVE BEEN THREE BILLION. YOU'RE TAKING MONEY OUT OF MY POCKET.
Carl, I can assure you that we don't have lavish spending habits. Heck, I flew United Economy to get to this meeting. We're not lavish here.
YOU SHOULD HAVE TAKEN A GREYHOUND. IS IT TRUE THAT YOU'RE COVERING THE HEALTHCARE COSTS OF EMPLOYEES WHO ALREADY HAVE OVARIAN CANCER WHEN THEY ARE HIRED? AND SLEEP APNEA? AND SICKLE CELL ANEMIA?
Um...yes, I've confirmed that we are covering those.
AND HOW MUCH EXTRA ARE YOU CHARGING NEW EMPLOYEES FOR HEALTHCARE WHEN THEY HAVE THESE CONDITIONS?
All employees are charged the same rate regardless of these factors.
AH, SO YOU ADMIT IT! YOU ARE GOING WAY ABOVE THE MINIMUM THAT THE GOVERNMENT REQUIRES, AND BLEEDING THE COMPANY DRY! IT'S TIME TO REPLACE EVERY SINGLE PERSON ON THE BOARD OF DIRECTORS! WHO'S WITH ME?
(torches are lit)
So if the short-term shareholders have their way and force companies to "rightsize" their healthcare costs, the 52 million people figure may end up being an UNDERESTIMATE.
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