There’s been a lot of talk about denial of health insurance coverage due to pre-existing conditions in the health care policy debate. The answer to this problem presented by many of our elected officials in Washington has been more government mandates.
Specifically, impose guaranteed issue (no one can be denied coverage) and community rating (government limits the ability to adjust prices according to risk). The results are predictable – much higher insurance costs for all and fewer insurers in the market. And that is exactly what occurred in various states that imposed such measures, including New York and New Jersey.
There is another option that more than 30 states have implemented – high-risk pools. That is, states create high-risk pools to make coverage affordable for individuals with chronic diseases, with costs spread among insurers and subsidized by the government.
This kind of reform focused on those in need – rather than imposing mandates and regulations that expand and create more problems – makes the most sense.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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