Here’s the simple explanation for why health insurance companies should be allowed to, at a minimum, charge patients with pre-existing conditions more than those without, if not fully deny those patients coverage. First, an example: do car insurance companies charge different customers different rates depending on what type of car they have? Yes. Something as minimal as your car being red, which is statistically more likely to have a driver who will speed and/or get in an accident, can increase your premiums. So, why shouldn’t health insurance work the same way.
Let’s say you’re a health insurance company. Would you rather insure someone old and/or in poor health, who is likely to need to use medical services that you would have to foot the bill for, or would you like to insure someone young and healthy who is unlikely to use the same aforementioned services? If you want to run a successful business, you should take in money in premiums from the latter, who would probably not need any money back, and therefore earn your company a higher profit margin.
Pre-existing conditions should not be treated in any different way than a fancy red sports car being a higher risk to the car insurance company.
As far as the idea that the Democrats like to push, that it protects the middle and lower class to force insurance companies to insure people with pre-existing conditions, why that’s just absurd. First, with the Obamacare individual mandate in place, everyone (or at least a higher number than without it) will be essentially forced to purchase a health insurance policy (including extra people with pre-existing conditions). With people with pre-existing conditions, who will obviously need to use their insurance for medical bills at a significantly higher frequency than the company’s healthier clientele, being allowed to pay the same price as healthy people, who do you think pays the medical bills of those customers with pre-existing conditions? The rest of us. So in reality, this sort of forced semi-socialized medicine would actually be a detriment to the rest of the middle and lower class, who the Democrats claim they so dearly want to “protect”, by increasing their premiums severely.
The response to that would be probably be: “Well, I’d gladly pay higher taxes if it means that some of that will go to helping sick people.” If you want to spend your hard-earned money on helping sick people, I’d love you to, and something is already in place to help with such a goal. Charity. I’d be happy to join you in giving to charity, and more specifically a good charity that has low administrative overhead, unlike the federal government, and knows what to do in the field of health care, which the federal government also clearly doesn’t know a thing about.
The last concern would be regarding the economic repercussions for the insurance companies themselves. In a competitive market, usually the company with what is essentially the best bang for your buck will succeed. If insurance companies had the ability to operate on lower income, they already would have done that by lowering their rates to beat out the competition. If it’s not a worthwhile endeavor to start selling health insurance due to the amount of money being paid out to patients with pre-existing conditions, insurance companies will start to close down, or no new competitors will enter the market. Those people would know they couldn’t open a successful insurance company, so they would probably just go invest their money in the stock market for a more stable interest rate. This would also have a negative effect on the middle and lower class because there would be less insurance jobs going around. In 2015, more than 525,000 jobs were in the health insurance sector alone, and many of those jobs could be lost by making the industry significantly less profitable.
What have we learned? First, forcing insurance companies to cover people with pre-existing conditions has a negative impact on the rest of the lower and middle class who will have increased premiums because of it. Second, the Obamacare era individual mandate does not make this problem any better, since it just pushes the cost of people with pre-existing conditions to even more people, and forces more people with pre-existing conditions into insurance plans at the same time. Third, all of these previous problems cause the health insurance industry to be less profitable, and therefore put up to 500,000 jobs at risk.