Pre-existing Conditions: Greed or Common Sense

One of the statist battlecries of Obamacare has been that greedy insurance companies don’t want your business if you have a pre-existing condition. Or, if they want your business they’ll charge up the ying-yang.

A lot of emotion surrounds the issue but you can’t decide public policy on emotion. Imagine for a moment that you own an insurance company that limits coverage for people with pre-exising conditions or doesn’t accept those that have them.

You only cover healthcare for diseases or injuries incurred after people sign up. However, one day a woman comes along and wants to sign up. The problem is that she has a severe illness that would cost your insurance company $200,000 a year.

Are you going to let her sign up for a couple hundred a month? If you did, you would essentially be stealing from your existing policyholders. That money has to come from somewhere. And that’s where it will come from.

Insurance is not supposed to be like buying a winning lottery ticket. People sign up for insurance because no one knows in advance who will win and who will lose. If you already know you will win, it’s not insurance. It’s forced wealth redistribution from existing policyholders to you.

If you’re still not convinced, imagine if Obama pushed through major car insurance reform called Obamacar. With Obamacar, car insurance companies would have to charge you the same as any other driver and could not turn anyone away with a “pre-existing” condition.

These pre-existing conditions would include things like, smashed front-ends, stolen vehicles, burned vehicles, vandalized vehicles, damaged property or individuals.

What do you think will happen? It’s pretty clear. People will drive without insurance and then buy insurance right after they get into an accident or run over a pedestrian. Just pay a couple hundred dollars for a month or so until all the bills are paid and then cash out like a king. Do you think for one minute that car insurance rates won’t be higher than before “reform”?

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