RANT: Pre-existing conditions


Pre Existing Conditions – Understanding Exclusions and Creditable Coverage
HIPAA Pre-Existing Condition Protections
By Michael Bihari, MD, About.com Guide
Updated February 08, 2010

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Many Americans have health-related problems that insurance companies define as pre existing conditions. A pre-existing condition is a health problem that existed before you apply for a health insurance policy or enroll in a new health plan.

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An important feature of HIPAA is known as “creditable coverage.”

Creditable coverage is health insurance coverage you had before you enrolled in your new health plan, as long as it was not interrupted by a period of 63 or more days. The amount of time you had “credible” health insurance coverage can be used to offset a pre-existing condition exclusion period in your new health plan.

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Clearly the President and the various Congress Critters don’t understand the concept of “insurance”.

I know it’s a hard concept. But, in a population of people subject to the same RANDOM risk (i.e., meteorite), we can pool our premiums and award them to the “winner”. The Amish help their neighbors. The Mormons have their bishops. The Catholics have Catholic Charities.

We have “insurance partnerships”, like Lloyds of London, that will usually take the other side of any “bet” for the right price. We have “insurance companies” that have “standardized wagers” that they offer to take. That’s Life, Car, Health, and yes even Pet Insurance.

(What confuses us is that we don’t see the aggregation of the risk premium and the “apply – claims – payout” process as really a pass through mechanism. Like “corporate income tax”, only real people pay taxes. So when the “insurance company” has to pay for “pre-existing condition” — like paying off winning lottery tickets purchased after the drawing — it’s really transforming it into pre-paid medical care. Like insuring your car’s oil changes.)

(Let’s examine “insuring” your car’s oil changes. I can go get an oil change for 40$ (Jiffy Lube) to 75$ (Dealer). If an “insurance company” was involved, what would it cost? 500$ You’d have to compensate the insurance salesperson, the clerk to process the claim, and adjuster. And, of course, we have to have lawyers. Maybe 500$ is optimistic. Could be 1,000$. OR two!)

Note: This is NOT buying insurance AFTER the meteorite hits your house. Do you buy the winning lottery ticket after the drawing?

Economics IS truly the dismal science. We’ll always have shortages. But we have been given tools to manage the risks of life.

For car accidents, we have car insurance.

But once again, President Obama demonstrated his lack of economic understanding. Buying car insurance and expecting it to fix “HIS car after an accident. Obviously, he bought LIABILITY insurance; not collision or comprehensive insurance. For a lawyer, at this stage in his career to have such a misunderstanding of insurance is either: stupidity or duplicity. (Dumb or misleading? You choose!)

SO … … …

… … … “pre existing conditions” are buying the lottery ticket after the drawing.

… … … small costs should be out of pocket expenses; insurance is for BIG ones.

… … … health savings accounts with high deductible insurance sounds good.

And, politicians should be sent to “economics class” before they are allowed to vote!

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