US Medical Supplies Blog

About a month ago, I wrote about whether or not it would be prudent to continue your health insurance coverage under COBRA in the event of a layoff. Today I read that part of President Obama’s forthcoming healthcare reform plan is sure to include a provision that requires insurance companies to cover pre-existing conditions.

If this plan becomes a reality and insurers are required to cover plan participants that have a pre-existing condition when they sign on, millions of Americans that are currently unable to find affordable health insurance will be greatly relieved. At present, if someone with an ongoing condition that requires treatment is facing the prospect of a layoff and cannot afford COBRA coverage, they worry about being unable to find affordable insurance in the future after a lapse in coverage. That’s because after a lapse in coverage, any potential new insurer will consider them to have a pre-existing condition. In contrast, if someone has an ongoing condition and switches insurance companies with no lapse in coverage, the new insurer will accept the new customer into the plan without charging them a premium for their condition.

Obama’s plan makes a certain amount of sense, because it doesn’t seem fair if one participant has an ongoing condition and is covered by insurance while another participant with the same condition cannot afford insurance because of a lapse in coverage. It’s clear that the insurance companies use these policies to “weed out” plan participants that may actually cost the insurance company money.

My question is this: is it right to force insurance companies to take on customers it wouldn’t otherwise? If insurance companies could afford to take on pre-existing conditions without having to raise everyone’s premiums dramatically, wouldn’t the competitive nature of the market compel them to do so? I think it would be great if everyone had affordable insurance, but I’m also concerned about the potential economic effects. If the government forces the insurance companies to insure literally anyone, it will be a very short matter of time before premiums for all healthcare plan participants skyrocket.