Better Solutions for Pre-Existing Conditions

• Encourage Portable Insurance. Most of the time, the problem of pre-existing conditions arises precisely because health insurance isn’t portable.
• Allow Special Savings Accounts for the Chronically Ill.
• Allow Special Needs Health Insurance. Instead of requiring insurers to be all things to all people, we should allow plans to specialize in or more chronic conditions. Plans could specialize, for example, in diabetic care. heart care. or cancer care, and they would be able to charge a market price (say, to employers. other insurers. and even risk pools), and price and quality competition should be encouraged.
• Allow Health Status Insurance. To facilitate the market for chronic illness insurance, we should encourage two kinds of insurance: Standard insurance would cover the health needs of people during the insurance period, while health status insurance would pay future premium increases people face if they have a change in health status and then try to switch to another health plan. You can think of this as a way of insuring against the emergence of a pre-existing condition.
• Allow Self-Insurance for Changes in Health Status. The tax law allows employers to pay for current-period medical expenses with untaxed dollars. But there is no similar opportunity for either employers or employees to save for a future change in health status—one that will generate substantial increases in medical costs.
• Give Individual Buyers the Same Tax Break Employees Get.
• Allow Providers to Repackage and Reprice Their Services Under Medicare and Medicaid. We should encourage providers to create innovative solutions to the care of diabetes, asthma, cancer, heart disease, and other chronic health issues. Along these lines, providers should be able to offer a different bundle of services and be paid in a different way so long as they reduce the government’s overall cost and provide a higher quality of care.
• Allow Access to Mandate-Free Insurance. Studies show that as many as one out of four uninsured Americans—most of them healthy—have been priced out of the market for health insurance by cost-increasing, mandated benefits. At the same time, however, these mandates raise premiums for the chronically ill and divert dollars away from their care. There is no reason a diabetic should have to pay for other peoples’ in vitro fertilization, naturopathy, acupuncture, or marriage counseling, in order to obtain diabetic care.
• Create a National Market for Health Insurance. More competition, especially among the special needs insurers, would be a huge benefit for the chronically ill. Being able to buy insurance across state lines would encourage that competition.
• Encourage Post-Retirement Health Insurance.If the past is a guide, more than 80 percent of the 78 million baby boomers will retire before they become eligible for Medicare. This group has the greatest potential for denial of health insurance because of pre-existing conditions. Fortunately, one out of every three baby boomers has a promise of post-retirement healthcare. However, two out of three do not, and even for those who have a commitment, almost none of the promises are funded. A solution: give post- retirement health insurance the same tax encouragement as active-worker insurance and allow pre-retirement insurance to be portable.

Source: Priceless: Curing the Healthcare Crisis (2012) by John C. Goodman, Ph.D.