“I think people should be able to have insurance even if they have pre-existing conditions,” said Ms. Locke, 59, who works in Jacksonville, Fla., as a children’s museum director. Locke recalls jumping from one plan to another before Obamacare, when her husband’s heart condition threatened to cut them off from coverage. She plans to cast her vote for President Trump in November and expects he’ll do an excellent job on the issue, despite a policy record at odds with that premise.
“I’ve heard from him that he would continue with pre-existing conditions so that people would not lose their health insurance,” she said. “It’s made a big difference with my husband and me.”
Citing a survey from the Kaiser Family Foundation, The New York Times reported that 84 percent of Republicans believe President Trump has a better approach for “maintaining protections for people with pre-existing conditions”
The question is how. This question has been asked of Trump time and time again, but it never gets answered. On Tuesday, Chris Wallace asked President Trump directly to outline his plan to replace the Affordable Care Act, and yet again, he offered nothing substantive.
I am not a healthcare policy wonk, but in attempting to answer it, I found three fundamental structures: an individual mandate, high-risk pools in a primarily private insurance system, or government provided healthcare, which can take several different forms. The government can own the healthcare system as the British system, and our own VA system does, or the government can pay private providers as Medicare does.
But one constant among all three is that healthy people have to pay to cover the excessive costs covering pre-existing conditions imposed on the healthcare system. You can do it through taxes and penalties by having the government subsidize the price, or you can do it by mandating healthy people pay for insurance they don’t think they need or a combination. Still, there is no way to cover the extraordinarily high medical costs that people with pre-existing conditions incur unless healthy people help pay for it.
Why is that acceptable? Well, one argument is that as a general matter, most healthy people will get sick someday. So, you are paying into a system that you will be the beneficiary of at some point in the future, whether it is by being compelled to buy private insurance today or through your taxes to fund government healthcare or subsidize high-risk pools.
We can’t say with any certainty whether you will get a dollar for dollar benefit or even be one of the people whose benefits exceed the amount you have paid in. Still, we can say with some certainty that the odds are that you will need the coverage someday.
We have to accept the concept that if we want to cover people with pre-existing conditions, healthy people have to help pay for it one way or another.
So how does Trump and the Republicans propose we do it? As we know, they have not introduced any comprehensive legislative proposal. In research for this article, I was referred several times to the Health Care Choices 2020 website as the outline for what the Republican proposal will be. Still, that website has only a blank page with a promise that its “Coming Soon” – where the exacting details of its recommendations are should be.
Trump and the Republicans have made it very clear that they reject the concept of compelling people to buy insurance in the private market. They also reject any idea of the government providing healthcare, leaving the private market isolating the individuals with pre-existing conditions in high-risk pools. This is not a new concept. High-risk pooling was commonplace in 35 states before the ACA was enacted. Paul Ryan was an advocate when he was the Speaker of the House.
High-risk pools are used to remove individuals whose anticipated medical costs expect to exceed the premiums an average person would pay. They do this, so the premiums of lower-risk individuals do not skyrocket to cover their expenses. The problem is that the high-risk pool has to be subsidized by someone, or the people in it will not afford their insurance. The government – and therefore taxpayers like us – are the only source of subsidy left. The high-risk pool keeps the cost of insurance for the lower risk pool down, but if the government subsidizes the high-risk pool, the people in the lower risk pool are still financing pre-existing conditions. They are doing it through their taxes instead of the insurance premiums, which is the same way of funding government-provided healthcare.
And therein lies the reason that high-risk pools were largely abandoned. Studies have shown that high-risk pools were expensive because they concentrated people with health conditions into a single collection, with no healthy members to offset their costs. Governments did not want to subsidize them to the extent necessary. The studies suggest that Republicans like Ryan are grossly underestimating the number of tax subsidies that are going to be required to keep high-risk pool insurance affordable. There was a reason that conservative thinkers in the Heritage Foundation originally designed the individual mandate, and conservative governor Mitt Romney adopted it. As a concept, it kept the private sector as the primary mechanism for funding healthcare, which conservatives prefer.
So, where does that leave us? If you do not find a way to compel all healthy people to buy private insurance at a material cost, those same healthy people have to subsidize the sick people through taxes. You can do it through Medicare for All. You can do it through a public option. You can do it through government ownership and employment of the healthcare providers. You can do it through massive government subsidy of high-risk pools (or some combination of all of them.) But make no mistake about it: If you eliminate the individual mandate as Trump has, there is no alternative to cover pre-existing conditions other than subsidies through taxes in some form or another.
And let us not forget that the current federal deficit was approaching one trillion dollars before COVID, and it is now approaching $4 trillion. That also may be a big reason Trump does not want to answer the question…
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