What’s the Right Answer to this Problem?
It’s posed by Nicholas D. Kristof in the New York Times:
Mr. Waddington has polycystic kidney disease, or PKD, a genetic disorder that leads to kidney failure. First he lost one kidney, and then the other…. Doctors explained that the best match — the one least likely to be rejected — would perhaps come from Travis or Michael, his two sons, then ages 29 and 27.
Travis and Michael each had a 50 percent chance of inheriting PKD. And if pre-donation testing revealed that one of them had the disorder, that brother might never be able to get health insurance. As a result, their doctors had advised not getting tested…. “At the time David needed a transplant, the people closest to him couldn’t even offer a lifesaving donation — for insurance reasons,” said Mr. Waddington’s wife, Susan.
I’d love to know what the opponents of health reform think families like this should do.
End-Stage Renal Disease is the only specific condition covered by Medicare regardless of age. It’s a federal entitlement. Over time, lobbyists for dialysis centers were able to ensure a market for more convenient care never really developed. A dialysis machine is actually rather simple. Yet, most people with kidney failure have to set for hours (several times per week) in a chair tethered to a dialysis machine at a dialysis center. If a private market had been allowed to develop, people would probably receive dialysis from a machine by their bed at night while they slept. This is a fact Nicholas Kristof fails to appreciate.
Actual insurance would allow anyone to insure against the risk of PKD or any other medical problem, no? That’s how it works with life insurance, auto insurance, homeowners insurance — even when I rent a car, I can buy insurance to insure against the risk of wrecking a loaned car in an unfamiliar city.
Unfortunately, our current health insurance system is more like a pre-paid health care system instead of actual insurance.
First of all, opponents of health reform feel bad for the family. It doesn’t sound like the author cares about the family, and is just attempting to shame people that like solving issues instead of closing our eyes and throwing money at them.
I think Devon and Brian have covered the the answers, but I would like to add that under current law if they currently have insurance they couldn’t be dropped either, so the question is based on a false premise.
At age 29 and 27 the two sons presumably have their own insurance. If it is employer provided, it is issued without regard to health condition. If they lose their job and their employer provided insurance and have developed kidney disease they would still be eligible for state insurer of last resort coverage which is designed specifically to cover the uninsurable.
If they have their own health insurance, their policies will not be cancelled simply because they develop kidney disease. That would be illegal. Their rates won’t go up either unless the rates are raised for everyone.
The question for Mr. Kristof is why he doesn’t mention the fact that there is no such thing as an uninsurable person given that access to insurance for the uninsurable is required under federal law?
Devon, your first comment is utterly irrelevant to the question at hand. What are you talking about? Do you just have to BS an answer so other people against reform reading this can go from feeling uncomfortable with not knowing how to answer Kristof’s question to comfortable in knowing someone of their own answered it? Unbelievable
I’m only surprised that anyone here self-identifies as being “against reform.” I’m all for reform. Just not the kind Congress is about to ram through.
I agree with Linda that so long as the sons remain insured, then they should be able to continue with either private or HIPAA coverage indefinitely. But if they let it lapse– due to extreme financial hardship, for example, they may find themselves unable to resume coverage depending on where they live.
This topic shows two areas where proponents of risk rating aren’t really in favor of risk rating– (1) allowing an insurer to require genetic screening as part of the underwriting process, and (2) the ability of an insurer to drop coverage or raise rates in response to increased risk.
Rather than a black-and-white issue, insurance rating seems to be a continuum. If pure Lloyd’s of London-style risk rating is zero on a scale of zero to ten, then I’d guage some of the other forms of coverage as follows:
(0) Pure risk rating.
(2-ish) Private underwritten coverage; seems to be NCPA’s favored level.
(5) Employer sponsored insurance, depending on state.
(7-8) New Jersey-style modified community rating. Also HIPAA and risk pool coverage.
(9) Congress’s current proposals, as far as can be determined. Rate banded, 2:1
(10) New York State; pure community rating.
Do the numbers above seem reasonable? And if so, what’s everybody’s comfort level? Note that since most of us have employer-sponsored coverage, the status quo is predominately 5-6 by this scale.
Have we not learned by recent stock market events, and from what happened in 1929?
Is not the backbone and stability of our society and government the countries finances?
If our stock market, commodities, bonds and the like completely crashes \, what happens to the soverenty of our nation?
I suggest taking the panick mentality out of market trading, then take control of the healthcare system out of the hands of the insurance companies, pharmaceutical companies, and lobbyists.
Investing in the markets( all under proper guidance of course), millions make billions, billions return trillions, and so on.
If the money that is being dumped into the insurance companies and so on be put into the markets, could not then every person and their pets receive free healthcare in america?
Maybe help towards the defecit?
I have received a lot of positive response from fellow citizens regarding this idea!
Sincerely,
Brett Jones
Brett: you obviously do not understand health economics. Somebody has to administer health insurance. Even Medicare has administrators – and more ofter than not, it is Blue Cross.
Mark,
We are supposed to infer from Kristof’s column that a Medicare-for-All program of universal coverage would solve all the problems for this man and his family. My comment was intended to illustrate that people suffering from End Stage Renal Disease already have Medicare. Yet, large numbers of people die waiting for a kidney because Medicare is so bureaucratic.
Kidney transplants are considered more cost-effective than dialysis in long-term patients. The reason has partially to do with how inefficiently kidney dialysis is performed. The technology I referred to in my earlier post already exists. But it is not used frequently because it is not reimbursed by Medicare. I would argue this is a rationing technique that proponents don’t want to admit exists.
Devon, I understand your comment much more clearly now. However, I respectfully disagree with you and it seems (though, I do not know what news you read) you have been blindsided by the Fox News truck like many. You are clearly believing that the plans under consideration now are for government-run health care. That is a joke, a lie, and unethical journalism. The plan actually that is going to be voted on next week has NO public option and was shown this week by the CBO to GREATLY reduce the deficit. Kristof is NOT implying that a “Government-run Medicare-for-All” program would fix this family’s problems. In fact, he is saying that if pre-existing conditions were not discriminated against and more competition was in place (which HEALTH INSURANCE REFORM will do), and if INSURANCE (insurance DOES NOT EQUAL PUBLIC MEDICARE-FOR-ALL only) was made available/affordable to all then this family would be better off. I really cannot believe that at this point in the debate people still believe a single payer system is going to sprout from the ground. There is not even a public option in the most recent bill being talked about. The left have made GREAT CONCESSIONS yet lies still abound.
I agree with Mr. Ingles: I think you’d be hard pressed to find an “opponent of reform”, only opponents of a government take-over of peoples’ access to medical services, which is what the current effort is about.
Other commenters have pointed out that the sons are not as “unprotected” as Mr. Kristof alleges. However, if every American was able to own his own insurance policy, instead of being dependent on his employer or the government for it, the guaranteed renewability that we advocate (and is already in the law and practice) would be generation to generation. (Indeed, insurance broker Bev Gossage tells me individual policies have this characteristic already.) The artifical fragmentation of health insurance into employer-based group coverage leads to annual renewal as the default option, but actuaries can discount risk to an infinite horizon.
The only problem I have with guaranteed renewability is that as soon as you need to take advantage of it, you are effectively in a monopolistic relationship with your insurer. Which means that if you become dissatisfied with the service, you can’t take your business elsewhere. Which suggests that the insurance company would be free to, e.g., delay payment or limit access to chronic care. In other words, practices which have ironically been predicted to occur in non-underwritten plans.
Say what you will about group plans, but at least they have the concept of creditable coverage, which keeps a competitive market alive where it otherwise wouldn’t be.
Anyway, fragmentation of the insurance market is grossly in favor of group coverage by around a 10:1 margin. Of course this is due in large part to tax subsidies, but I just can’t see a conservative course of reform that would squeeze 70% of the nonelderly population of of their existing coverage in favor of a form of coverage currently used by less than seven percent.
Bart, the answer is John Cochrane’s proposal — which has been discussed previously at this blog. Change of condition insurance gives you the ability to switch insurers, all of whom need to have guaranteed renewability.
Ken, if that’s the only answer, I don’t know. The rating insurance idea is interesting as a thought experiment or analysis tool, but a bit on the hypothetical side to think of as an actual product.
For example, who determines what rate is appropriate, and whether the health insurer is underwriting appropriately and charging a fair rate?
It seems to me the ratings insurer would have to do its own underwriting, and then someone would have to arbitrate between the rating insurer and the health insurer to determine what risk determination is appropriate.
And when they do agree on the risk rating, who sets the actual price? Is it done by negotiated contract, the way PPOs negotiate with providers? In that case, would the rating insurer restrict your ability to choose a health insurer for which there is no negotiated agreement?
Or does the rating insurer merely agree to pay out a certain amount based on some risk metric, and leave the patient to make up the difference and find a health insurer he can afford, with no guarantee that the rating payout will come close to the health premium?
Maybe all of this has been worked out, but I’d like to see it in practice. I’m not saying this could never become a product, but I just can’t imagine squeezing 70% of the pre-65 population out of group plans and into this setup over a short period of time.
Anyway, none of the recent tax-based proposals, e.g. McCain’s or Coburn’s, used this. So saying that rating insurance is the answer pretty well drives the stake into those proposals.
In the meantime why not start from what works?