Every Private Health Insurer In Existence Should Be Perfectly Free To Refuse To Cover People Who Have Pre-Existing Conditions

Sometimes it’s best to state one’s unpopular/out of vogue views directly and upfront with no sugar-coating. Let me try to explain straightforwardly what I already explained with sarcasm – a view I hold that, it seems, would cause people to consider me a Neanderthal in mixed company:

Insurance companies should be perfectly free to refuse to cover people who have pre-existing conditions.

Why? Well, I think we have to go back to basics and ask ourselves what an insurance company is, and sells: a group of people that sells a contract that says “pay us $X/year, and in return we promise to give you this list of payouts in the event that such-and-such health events occur”. (Obviously the role of “insurance” has drifted somewhat, because nowadays the payouts seem to trigger even on run of the mill events such as ‘regular checkup’, but that doesn’t change the preceding description.)

Insurance companies, of course, are private groups of people in a business to make a profit. They are not in it for charity. They do not even need to exist (they are not features of the landscape, nor groups of immortals). They are people, like everyone else. So in order for the whole thing to be at all worth it for them, they need the “$X/year” part to match up – more than match up – with the “list of payouts in the event” part. Otherwise, what the hell are they doing it for? Otherwise, why wouldn’t they just close up shop and send all their employees/actuaries to find other jobs?

That being established, let’s ask ourselves what a “pre-existing condition” is. Seems to me it’s a health condition that makes a person far more likely to need payouts. Right? If it means anything, that’s what it means.

Now then. If you’re far far more likely than the average person to need payouts, but you still think that insurance companies “shouldn’t be allowed to” refuse you an $X/year insurance plan, what are you saying? Essentially you’re saying you have the right to get something for nothing. You have the right to pay less for a contract than it’s actually worth to you. You have the right to demand that other people give you way, way more money than you’re giving them. Equivalently, that insurance companies (which, remember, are groups of people) – any group of people that happens to be associated as an ‘insurance company’ and that you decide to approach – are required to subsidize you upon demand.

But that is absolutely, positively, utterly freaking flat-out ridiculous. If that’s what you think, my only question is, what the hell is wrong with your head? Are you an idiot?

What the hell gives anyone, pre-existing condition or not, the right to demand that other groups of people “cover” them (i.e. give them large payouts in return for small streams of money)? Hello? Anyone? Can someone explain that to me?

If you have a “pre-existing condition” I certainly recognize that you’re in a bind. But trying to get the government to force other people to give you large sums of money (which is what such a rule amounts to) is not the solution. Hey, I’d like large sums of money too! Can I get the government to force other people to buy me a house in exchange for me giving them a baseball card? Pay for my kids’ college in exchange for me giving them a $2 bill?

The fact is that someone with a pre-existing condition is (on average) going to be getting huge huge payouts compared to the value of the typical “$X/year” insurance plan. A contract that says “we’ll pay out a million dollars if you pay us $800 a year” is going to lose that company money. Period. But companies do not exist for the purpose of signing contracts that lose them money. People at companies who sign such contracts get fired, as well they should. So companies certainly should not be forced by the government to sign contracts that lose them money. But that is what “covering” a person in known bad health is: a contract that is very very likely to lose an insurance company money.

Companies can and should be perfectly free to refuse to do so. There should be no legal restriction or even social taboo on any company that refuses to do so.

Alternatively, I suppose companies can (if they choose) quote such a person a true market rate for covering them. After all, even people with pre-existing conditions won’t cost their insurance company an infinite amount of money. Maybe if instead of paying $X/year the person would pay 10*$X/year, then the contract would be worth it to the company. That’s for the company to work out, and it’s for the person to decide whether they want to enter that arrangement. For the government to force the company to give that person a below-market rate (of only $X/year) is flat-out wrong.

And of course, all that really results is that the other policyholders, of average-or-better health, pay higher premiums because of it. In other words, healthy people end up subsidizing the unhealthy. If this is a good idea or a necessary one, let’s have it be done via a safety net – which we already have (it’s called Medicaid). Instead what we constantly see from “progressives” are proposals to launder their safety net through private companies via rules, regulations, and ridiculous distorting mandates. This seems to be today’s left’s new favorite method of socialism, yet in a way, it’s not a new method at all. Back in some of the early decades of the 1900s it went by the name fascism.

And it is wrong.