Pre-existing Stupidity

The House passed something that isn't really a repeal but rather a scaling back of Obamacare.  In order to get enough votes, more money had to be injected for those with pre-existing conditions to be covered by 'insurance.'  Obviously, Congress still does not understand how insurance works.

Let's consider a house.  The house is worth $200,000.  Flo is willing to insure the house against fire, burglary, hail damage, etc. for $2,000 a year.  Both the home owner and Flo hope that the insurance policy never pays off.  Flo doesn't want to give back that $2,000 she has been getting year after year and the home owner would rather that the house didn't burn to the ground.  However, if the worst happens, the home owner dodges financial ruin thanks to Flo's accepting that risk.  Now, consider if the home owner had not purchased insurance and instead decided everything would be fine.  And then the house burned down.  Well, the smoldering ruins of a $200,000 house are a pre-existing condition and Flo can't deny coverage.  Therefore, by law, Flo sells a policy to the home owner and then rebuilds the $200,000 house after requiring a $1,000 deductible.  That's not insurance, that's a path to bankruptcy.

 

How about a wife buying a $500,000 life insurance policy with the pre-existing condition that her husband died last week?  What if a driver wants to increase his coverage after having driven his car through the supermarket?  The huge costs are a pre-existing condition.

 

Flo stays in business by selling insurance to many home owners while knowing that comparatively few of them will suffer catastrophic harm.  The same is true for health insurance.  It would be foolish to sell a $6,000 a year policy to a person who already requires $5,000 a month in treatment.  That's not insurance, that's charity.  If mandated by law, that's welfare.  By requiring companies to 'insure' the wrecked car and smoking remains of a house, the premiums will necessarily skyrocket.  Duh.

 

If this reform manages to get through the Senate and find its way to Trump's desk, it will manage to transfer blame for bad healthcare to the Republicans.  Well done.  A better option would be to get the government out of the 'insurance' business and just create a bail out program for people with pre-existing health issues.  It would be vastly cheaper than the latest government overreach.