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Peter1469
05-27-2017, 01:57 PM
Costs and the Pre-Existing Conditions Pledge (http://www.realclearhealth.com/articles/2017/05/22/costs_and_the_pre-existing_conditions_pledge_110604.html)

Obamacare and the AHCA promise to cover pre-existing conditions. That is a problem when one considers costs. The article discusses four issues. And four ways of dealing with them:



My colleague Charles Blahous (https://economics21.org/html/who-should-pay-cover-pre-existing-conditions-2327.html) says there are four ways to handle the pre-ex problem: Have sick people pay for themselves (which no one suggests). Look for mysterious deep pockets (harder than it sounds). Ask younger, healthier insurance purchasers to subsidize sicker people (the ACA’s general approach). Or have taxpayers subsidize pre-ex coverage (the AHCA’s approach).

Obamacare flopped because it is based off the third option. Asking younger people to pay more to make sure the sick and old are paid for. The younger people opted out.

High risk pools with taxpayer subsidies gets around this problem. These high risk pools just have to be fully funded. I have a thread of this elsewhere here.


The best long-term strategy may be to level with the American people—allocating enough money to finance this expansive promise or moderating the promise itself. At the same time, remember that the pre-ex debate does nothing about the high cost of care—only about who pays. Our real challenge is to enable innovators to bring the costs of care down (https://economics21.org/html/pre-existing-condition-changing-subject-1470.html)—as we saw with information technology over the past 25 years.