After Repeal: A Common Sense Alternative to HCR

Note: I began this post as a response to CSUFBomb, who is insured through his former employer, has a serious condition, and is worried about losing his benefits once his COBRA runs out. I thought I’d share it as a diary.

As we embark on the road to repeal, much discussion has been raised over what the Republican replacement should look like, how we should educate the public on how pre-existing conditions should be handled, etc.

I think I’ve come up with a solution that is pro-market, will actually reduce costs, and — most importantly — will not usurp any individual rights of the people or make the public, insurers, or doctors beholden to the invincible pen of a faceless Washington bureaucrat. Of course, this idea is not totally original (and hopefully, as I claim, mostly common sense); but I think and hope that it condenses the main conservative requirements for health care reform in as few words as are required.

My health insurance reform has four fundamental planks:

1. You (the individual) are free to negotiate any contract you like with any health insurer; in state or out of state, with any coverages you and your insurer agree to.

2. The government will enforce the agreement — as it should in any case that a dispute between two civilian parties arises.

3. The insurance takes effect at the time of the injury/illness and has permanent effect. That is, if you are insured against an illness, and you get that illness, your insurer will cover any and all current and future effects stemming from that illness (within reason, as determined by the courts).

4. Loser pays (tort reform).

That’s it. Even with all the legalese, this reform could be made to fit on a 3×5 index card, and — I believe — solve all of the bemoaned inadequacies of the current health insurance system.

Point 1 implies, first of all, that a private insurer will not be required to cover any individual condition. If they choose not to cover it, the government will not force them to. If you choose not to purchase coverage for it, the government will not force you to pay for it. The first point also allows for individuals to associate themselves for group coverage in any way they see fit.

If, for whatever reason, you don’t like the terms negotiated by an insurer, you are free to take your business elsewhere, anywhere. Any insurer who is too limiting in the list of coverages they provide will find themselves quickly losing market share, so this is a free market solution to providing the types of medical coverage people actually need and want.

However, no private party should ever be forced by a government agency to enter into a contract with another private party, particularly at a guaranteed financial loss.

Point 2 and 3 together speak to portability: if you change companies or decide to fire your insurance company, any future insurers will not need to cover your pre-existing conditions, because your previous insurer already is.

Consider this: imagine you are in an accident which damages your vehicle and your back. Assume it takes 1 week to fix the car and 10 years to fix your back. If you decide to change auto insurance a day later, you do not expect your next auto insurer to fix your broken car — it was damaged while the previous policy was in effect. Why should you be shackled to purchasing coverage from the same health insurer for the next ten years to get your back fixed? Of course you shouldn’t — you already paid for that coverage, that injury already occurred, and at this point, there is no more insurance of any kind — simply the assurance that you will receive what you already paid for and collected on.

I would go so far as to say that you should be able to drop your “injured my back in a car accident” coverage the next day as well (if you actually wanted to); it wouldn’t change the fact that you were insured at the time the injury/illness occurred.

The benefit of Point 3, what (perhaps) makes my reform unique from other ideas out there, is that it enables companies to continue to provide health insurance as a benefit, should they see fit to, because if you decide to leave the company at a later date, you are not limited by any medical conditions you may have developed.

Anyway, please let me know what you think. The argument for coverage of pre-existing conditions is a compelling one, and I think this could provide a totally conservative and easily understood alternative.