Thursday, November 20, 2008

Health insurers agree to drop pre-existing condition exclusion

You read that right. According to an article in today's New York Times, the two big health-insurance industry associations have agreed to enroll all applicants, regardless of pre-existing condition. The catch? They will only do so if Congress requires all citizens to have health insurance.

The industry's concern is pretty easy to understand: moral hazard. Without a requirement of universal participation, health individuals will have little or no incentive to have and pay for health insurance until they need it, with the assurance that after a serious accident or the diagnosis of a significant health condition they can't be turned down by a health insurer. The system works best, as one industry spokesperson made clear, when everyone's in, so that the healthy contribute to the payment of health-care costs for the sick and injured.

During the presidential campaign, Hillary Clinton favored universal mandatory coverage, while Barack Obama supported mandates only for children, preferring to wait until insurance was demonstrably affordable and available for all. Yesterday's announcement addresses the latter concern. All that's left (as if this were a small detail) is to ensure that insurance products are affordable -- AND to agree on a mechanism for ensuring universal participation in the insurance pool. These are far from small details, but at least the industry is showing some willingness to move in the direction of significant health-care reform.
posted by Tom Mayo, 5:33 AM

Health care law (including public health law, medical ethics, and life sciences), with digressions into constitutional law, poetry, and other things that matter