TrumpCare Fails the Most Basic Tests of Insurance

My late father, a staunch Republican would sometimes muse, “Which is the greater problem we face, ignorance or apathy?”, only to conclude most would respond, “I don’t know and I don’t care.”  As a life-long Republican myself, it pains me to say that in passing the AHCA, House Republicans are guilty of both.

I spent 30 years in the insurance industry and I can attest the health insurance is complicated.  But the basics are simple!  On day-one of my insurance career in 1970, I learned that insurance serves but one purpose as the instructor drew this “risk treatment” chart on the board. 

I would have to say what the House has passed on to the Senate is a “fine health savings plan.” In other words it fully addresses risks from the left side of the chart, things we could handle on our own with a little planning and budgeting, while excluding entirely anything that might meet the definition of an insurable risk. 

Sure it’s nice that my homeowner’s policy will cover replacing shutters and shingles blown off in a storm, but my reason for buying the insurance is for major events I really never expect to see and I can’t manage out of pocket like fire or tornado.  Fortunately property insurers can’t set up separate pools for those who will experience fires and tornados because the damages from these are immediate and do not carry forward for a lifetime like the illnesses listed below.  Here is a partial list of possible pre-existing conditions in the AHCA that are excluded from the basic plan that may only be covered in separate more costly pools.

My wife, Kathi was recently diagnosed with Parkinson’s disease at age 73.  Like most of those on the list such a diagnosis is a low frequency and high severity event, precisely what insurance was designed for. 

It is so rare and unexpected that given the choice, I never would have bought a policy just for Parkinson’s.  No sane person would.  But at this point, how would pooling my risk with other Parkinson’s patients to reduce my expense?  I guess it might help if we are pooled together with the Acne sufferers (just to prove how absurd this notion is). 

Technically there is no longer any risk of Parkinson’s disease to insure because it’s now a certainty.  Insurance companies do not insure against certainties.  There’s no insurance plan here.  The AHCA’s basic formula is simply a “Health Maintenance Savings Plan” costing what it might cost you to manage routine medical costs yourself plus administrative fees.  The “so-called” high risk pools are not insurance because there is no risk to insure because the pooled risk is by definition a certainty.  For such a pool to be profitable every Parkinson’s patient must pay on average what the lifetime of treatment would cost him anyway plus administrative fees.  Republicans seem to tout choices above all else, even when these choices are untenable.  The failure of House Republicans to even understand how insurance works, earns them the ignorance award.

The beauty of the Republican plan is no matter what the final bill looks like they can guarantee that everyone will be protected.  If you listen carefully you will hear that this is not because of anything in the bill itself, but because of separate laws stating that, “emergency rooms cannot turn anyone away.”  Are emergency rooms equipped to provide a Parkinson’s patient a long-term treatment plan?  Of course not!  Will this cost taxpayers more in the long-run?  Of course it will.  Will it hurt those most in need?  Absolutely!  They simply don’t care.  When your goal is to find money in the Federal budget to build a symbolic wall no sacrifice is too great.