Trying to Understand the Pre-existing Conditions Issue

One of the bigger talking points for health care reform was the idea that greedy insurance companies turn away people with pre-existing conditions.

The confusion over these kind of claims is amazing. As I dig into issues like this even a little bit, I get more and more worried that we were being sold a pig in a poke and/or that many legislators and advocates did not really understand what our current health care system really is like. If they don't understand the true nature of what we have, how can we trust them to design something new?

(I have already pointed out in this blog two other major areas of confusion, one being that most folks who get insurance through their employer are actually part of a self-insurance program; and the other being the large extent of miscounting in the percent-of-GDP calculations for health care.)

So a friend and I were wondering why Dartmouth College had dropped its pre-existing conditions clauses several years ago. I remember having to deal with such issues when hiring faculty, but we no longer have such clauses for new employees. The most likely explanation (I wish I could say enlightenment on the College's part but I don't think I can) was a new Federal law: HIPAA, or Health Insurance Portability and Accountability Act of 1996. I recommend this site to get an overview. Here is a brief description:

HIPAA is a federal law that:

Limits the ability of a new employer plan to exclude coverage for preexisting conditions;

Provides additional opportunities to enroll in a group health plan if you lose other coverage or experience certain life events;

Prohibits discrimination against employees and their dependent family members based on any health factors they may have, including prior medical conditions, previous claims experience, and genetic information;

and

Guarantees that certain individuals will have access to, and can renew, individual health insurance policies.

Now this law does not solve perfectly a key issue involving health insurance, that being the ability of individuals who have not had group-based health insurance to continue with individual insurance (at reasonable prices). But, I note that it did solve many problems that could have affected the vast majority of people with health insurance, that being the difficulty in even switching jobs if you have health issues. (I think that many people still think that they can be denied coverage by a new employer for pre-existing conditions. Probably many of those folks support health care reform on the basis of that faulty assumption!) I also think that HIPAA points the way to MODEST reforms that could be made to the individual insurance market that would help alleviate the issues that remain in that market (even short of the policy change that would really help that market, that being severing of the tie between one's employer and one's health insurance).

Lake Skating

For anyone interested in a real new winter adventure, I highly recommend lake skating. Check out these pictures of Goose Pond in NH yesterday. The entire lake, all 550 acres, was like a hockey rink. Snap a pair of nordic skates onto your cross country ski boots, buck the North wind up to the head of the lake (avoiding frostbite), then turn around and scream down to the other end.

I was a little afraid yesterday to go across the wide part of the lake to get to the other side, but today I am going to do it. As they say, it's not a sport if you can't get killed doing it.

Getting Intimate with the iPad?

It was well below zero yesterday morning, and the fire in my woodstove had burned down to only glowing coals. The temperature was probably about 45 degrees in the house. So, with a cup of coffee in one hand and my iPhone in the other, I stayed in bed and cruised the web and got all the Saturday morning news. All my favorite sites...Fox, Drudge, RealClear Politics, Roger Pielke Sr. ...

The interesting thing is that I had my laptop with me as well, and could have been using that. I would get a bigger image, but I would not really be as comfortable. With the iPhone, I could move around at will, and of course the image orientation followed me.

Two eureka thoughts. The first one was, hey, wouldn't a slightly larger version of the iPhone make this picture even sweeter? Yes indeed it would. A nice light device, with a large screen, and one that would allow me to multitask easily from a website to maybe a book that I had been reading? Thank you Steve Jobs -- I can see an iPad on my wishlist.

Second, I had jumped around to myriad news sites, including the WSJ, BBC News, Washington Post, Washington TImes -- :), New York Times, but I had not paid anyone a single dime for all that good reading. Sure, a few advertisements were somewhere in my screen occasionally, but on an iPhone one hardly notices them.

I am still waiting for Steve Jobs to figure out some way to package news content with the iPad, and charge me a monthly fee for it. Yes, that will be painful, but I am willing to do it. How much? Let's see...if you gave me the Economist, WSJ, New York Times, Shooting Illustrated, Washington Post and maybe one or two others...I already pay a hundred dollars per year each for the first two...how about $50 per month?

A Bad New Beginning

Obama has conceded that goals for a health care reform package need to be revisited in light of the Massachusetts Surprise.

But he gets off to a very bad start with this line:

We know that we need insurance reform, that the health insurance companies are taking advantage of people.

How about stopping the blame game and the populist rhetoric for a better beginning? If we want to eliminate the pre-existing conditions clause, how about we start by honestly recognizing the basic and real problem faced by self insuring employers and insurance companies of individuals who stay uninsured but as soon as they get seriously sick opt into the insurance pool? Pre-existing conditions clauses prevent that.

I suggest a small commission of smart, unbiased, action-oriented individuals who would come up with a nice clean set of changes to our health care system that would meet a small number of clear objectives. And then have Congress vote up or down with no option for bribes and payoffs.

Hope Springs Eternal

There is a ton of writing out there on the election of Scott Brown by the voters of Massachusetts, and much of it is very good.

I will just add a couple thoughts. One is that I derive a LOT of hope and optimism from this result. The electorate does matter, that is very clear. A seat that anyone would have thought was tenured to the Democrats long ago was taken away by a Republican in a blue, blue state. Wow.

Two, I think this puts the country back on its trend line of an electorate slightly more conservative on at least economic and defense issues. The election of Obama and the Democratic Congress was the bigger aberration. But how could that not have happened, with two wars, an unpopular Republican President, an economy on the brink of a second depression, and a lackluster Republican candidate and his somewhat problematic running mate? And Obama did not exactly win a landslide.

But three, I would be cautious in interpreting this as a massive turn to the Republican Party. This was an expression of outrage at government, ie., the incumbents broadly speaking and the Democrats in particular who are in charge and who are spewing out trash like the exemption of union workers from the cadillac health care tax. The Republicans can capitalize on this by actually coming up with some constructive ideas on, for instance, health care. And taxation -- and more than just "cut taxes." How about a serious review of the income tax code. I for one will volunteer a slight increase in my total tax payment if part of the deal was a broadening of the base, a lowering of marginal rates, and a general elimination of complexities like the AMT.

Venezuela Appropriates a French Chain of Stores

Will the French invade in response?

More realistically, how long will this Chavez fiasco in a once-great country continue?

Story on the expropriation here and here.

Betting Markets Predict a Scott Brown Victory!

One of my colleagues alerted me to the recent trading activity on InTrade. The runup in price for the Scott Brown contract, and the corresponding decline in the M. Coakley contract, is just amazing. Not a lot of volume in the market, and I still think it is too good to be true.

The AM radio station 1030 WBZ must be enjoying a tremendous revenue windfall, as is the NECN news channel. Ads for Brown and Coakley are running almost continuously. I do think that the Coakley ads, at least some of them that I have seen, are markedly negative -- dark, nasty images and pictures of (horrors!) George W. and Dick Cheney.

On NECN right now, a Coakley ad is running. It claims that Brown would deny rape victims immediate contraception. I heard Brown on the radio earlier denying that explicitly. In fact, here is news that Brown is claiming defamation against the Massachusetts Democratic Party for such a claim in a mailing it sent out.

The Stench of Health Care Deals

I just cannot believe that the Democrats and Obama have stooped so low as to give the unions five years more than the rest of us, in regard to when a tax on "cadillac" health care plans kicks in. Is that sad or what? In order to get the support of the unions, Pelosi, Reid and Obama have to pay them off with petty cash. See here for a description of the story.

Why would any rational policy exempt workers who are identical in all ways except they are covered by a collective bargaining agreement, i.e., they belong to a union?

This comes on top of the buyout of Ben Nelson and Nebraska, and a few other groups as well. It's been a while since I read the Senate bill, and I suppose I should get out a bottle of wine and PeptoBismol and do it again. (Note that reports today had Nelson asking for removal of Nebraska's special status, but I will believe equal treatment of states when I see it.)

The other thing is that they are really gutting the cadillac tax, by raising the limit, excluding "high cost states" (what is the point of reform anyway?) and by now excluding vision and dental. I wonder when people will realize that the current version still includes reimbursement accounts. The cadillac tax is not such a bad idea, in a world of second-best, but if unions and longshoremen and others get breaks I drop my limited-to-begin-with support.

Too Good to Be True

If Scott Brown were to win the Massachusetts US Senate seat held by the late Teddy Kennedy, what would that qualify as?

Definitely a political heads-up to any Democrat who wants to keep their job.

Tuesday night is going to be a late one. I hope I don't have any meetings Wednesday morning scheduled.