Thought For The Day On Healthcare

Thinking about healthcare and its providence this morning. Historically, this country has been driven by entrepreneurship and small business growth. Since 1998, we have been in a period where job creation through small business is much worse though slightly improved since 2010. One part of that is likely the connection between a steady job and healthcare. The Affordable Care Act while flawed in some ways at least incentivized job creation implicitly by allowing freelancers and entrepreneurs access to healthcare on the exchanges. Of course, one of the drawbacks to the ACA was that not everyone went through the exchanges because if you have a job, you get your healthcare there.

What kind of system could a thoughtful conservative humanist (a oxymoron in the leadership of the GOP of today but that’s a thought for another day) come up with as an improvement on the ACA that would foster job growth through small business creation? One of the benefits of other types of insurance is that they are semi-free markets. If you want to change your home insurance, you can research a variety of options and pick one of your liking. You cannot do this with healthcare because you likely can’t find a suitable replacement for your workplace plan on an exchange. One key to the ACA was the elimination of preconditions:

ObamaCare eliminated pre-existing conditions starting in 2014. No more pre-existing conditions means you can’t be denied coverage, charged more, or denied treatment based on health status.

Preexisting conditions are an interesting concept. If I have four car accidents that I’m at fault for, I have to pay more for auto insurance and might even get denied. But that’s not a precondition. That’s me being an idiot or just a bad driver for which no sane person would expect me not to pay more for. But if I eat nothing but Cheetohs and jelly beans for a few years and develop Type II diabetes, we don’t say “that’s not a precondition because it’s your fault.” We naturally have a sense of fairness in auto insurance that’s lacking in health insurance discussions because it’s hard to look at someone suffering from Type II diabetes and say “that’s largely your fault.”

Plus if you notice the clause in the preconditions statement: “you can’t be charged more.” This is clearly a disincentive for the companies providing insurance because you definitely cost more with preconditions. That means people without preconditions are the ones who pay the difference. This also violates our natural sense of fairness. If I drive a Ferrari, I shouldn’t be able to get insurance for the same cost a Camry owner does.

Any conservative policy is going to want to deal with preconditions in a way that’s fair to people getting insurance but also that doesn’t disincentivize companies from providing insurance. How is that possible? We have to be hard on people who through mostly or entirely their own actions, cause themselves to be more expensive to insure. How can we craft a policy that does that? Out of time for today…