What’s in Obamacare, Part 8:
Prohibition of preexisting condition exclusion, and requirements for fair premiums
Prohibition of preexisting condition exclusion or other discrimination based on health status:
Under Obamacare, no health insurance provider may impose any preexisting condition exclusion for any health insurance policies the provider offers.
“In GENERAL. —A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage” -H.R. 3590, Patient Protection and Affordable Care Act, Subsection 2704, page 78
Fair Health Insurance Premiums:
Obamacare prohibits health insurance providers from raising premiums on any individual based on their health condition. The bill also sets regulations limiting the reasons why a health insurance provider may raise an individuals health insurance premiums. Premium rates for health insurance plans may vary for these reasons only:
- “whether such plan or coverage covers an individual or family”
- Age (the rate cannot vary by more than 3 to 1 for adults)
- Tobacco use (the rate may not vary by more than 1.5 to 1 for tobacco users over non-tobacco users)
- A predefined rating based on age, tobacco use, and the number of family members covered under the plan
Now, for all of you liberals out there thinking, “this is great, now those evil insurance companies won’t be able to make huge profits off of all those poor unfortunate souls,” consider two things. First, the average profit margin, keyword “margin”, for the health insurance industry is about 3.4%. So what’s your plan? Cut there profits down to 1%, 0.5%? Why not 0%? Secondly, health insurance works by enrollees paying into a pool of money which is then paid out for medical expenses and other costs. The high risk enrollees pay a higher premium because they are likely to cost the company more. Often times more than they pay in. Lower risk enrollees pay a lower premium because, obviously, they cost the company less. Often times less than they pay in. The idea is that the amount received from premiums will be more than the amount paid in on medical expenses. Thus, the company makes a profit. If the company can no longer make a profit, there is no other reason to be in business. If limitations on how much a health insurance provider can charge their high risk enrollees compared to lower risk enrollees are too strict, the likelihood of the company actually paying out more than they take in increases. The company then has one of two options. Raise premium rates for everyone, or go out of business. Given the other regulations in this bill, the later of these two is more probable. In the end that leaves us with very few available insurers, or possibly only one, the United States federal government. Thus, securing America, as a socialist, welfare, nanny state. If you really want the government to take care of your every needs, there are plenty of countries that will already do that for you…so move. As for me, no thanks, I enjoy the freedom to do for myself. The individual is far more capable than the government of securing his own life.
References: H.R. 3590 Patient Protection and Affordable Care Act, ‘‘SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS, Page 78-82
Find out what else is in the bill