By Dan Calabrese ——Bio and Archives--May 8, 2017
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With Obamacare, our health- insurance system relies on younger, healthier people subsidizing the costs of the older and sicker. As a result, insurance costs consistently increase to cover the costs of people who are considered “high-risk,” namely those who are sick or who have preexisting conditions. High-risk pools and reinsurance programs at the state level address this concern and have been successful in the past. Our plan establishes a program to provide federal resources for states to create high-risk pools, reduce out-of-pocket costs or promote better access to services. States know better than the federal government how to allocate and manage resources to address the needs of their people. Our plan allows states to serve and provide financial support directly to vulnerable populations, including people with preexisting conditions. We’ve seen this system work before — just look at Maine. After the state created an “invisible” high-risk pool (“invisible” because it did not cordon off people with preexisting conditions from the traditional market) and relaxed its premium rating rules in 2011, people with preexisting conditions continued to have access to health care and their premiums were cut in half. Young and healthy people could finally afford to enter the market, and prices stabilized even further. This approach was more personal, reasonable and innovative than anything a bureaucrat in D.C. could have imagined.
To me, protecting people with preexisting conditions isn’t just good policy — it’s a personal mission.The high-risk pools contained in the AHCA will cost taxpayers some money, no doubt about it. They essentially serve as a stand-in for a private market that couldn't possibly exist because it would be a guaranteed money loser from day one. So why have such a pool? In business there are concepts known as loss leaders. You know they will cost you money but they set you up to make even more money in other areas. The loss leader that is the high-risk pool allows everyone else to obtain insurance in an entirely separate, and much less expensive, pool. It also helps make it possible for the AHCA to repeal the individul mandate and the essential benefits requirement, which means you can buy coverage for what you want, and not for what the government says you must be covered for. This is going to make health insurance work much, much, much better for 96 percent of those who are insured, while accepting that some taxpayer funds will be necessary to meet the needs of the other 4 percent. It's not perfect, but it's much better than ObamaCare, which taints the risk pool for everyone by throwing all policyholders together and refusing to allow insurers to treat anyone differently than anyone else - even though some people obviously represent far greater risks than others.
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