A few days ago I noted that health insurance companies were starting to price certain drugs at higher rates. Not just certain brands of drugs, but entire classes of drugs. This is being done in an apparent attempt to discourage patients with certain conditions from applying for insurance. Better to have some other insurance company pick up the cost of their expensive illness.
The reason this is happening is that Obamacare prohibits insurance companies from turning away customers with pre-existing conditions. So instead they need to find cleverer ways of making sure they’re someone else’s problem. David Henderson comments:
I predict that none of this will cause Kevin Drum to reconsider his pre-existing view that pricing for pre-existing conditions should be illegal.
Quite right. When it comes to Obamacare, there are two kinds of people. Henderson is the first kind. Whenever they hear about a problem, their invariable response is that this proves Obamacare is a hopeless mess and needs to be abandoned.
I’m the second kind. When I hear about a problem, my response is that we need to try to fix it. This is because I believe everyone should have access to decent health care at a reasonable price, and one way or another, we need to figure out how to provide it. We don’t give up just because it’s hard.
For what it’s worth, this particular problem is not something that’s taken any of us by surprise. Capitalism has a well-known capacity for motivating people to find clever ways to make money, and Obamacare supporters were all keenly aware that insurance companies would try to game the rules to maximize their profits. It was one of those things that required constant vigilance. Unfortunately, that never happened because it turned out that Republicans in Congress are so uncompromisingly opposed to Obamacare that they’ve prevented problems of any kind from being addressed, apparently in the hope that someday these problems will grow serious enough that the public will turn against the whole thing.
I guess you can decide for yourself if you consider that a praiseworthy response to a law you don’t like. I consider it loathsome myself. As for my pre-existing view about pre-existing conditions, that’s easily explained. I supported Obamacare as a good first step, but if I had my way the whole edifice would get torn down and replaced with a sensible national health care plan of the kind used by virtually every other civilized country on the planet. This is because health care of the kind that civilized people desire simply isn’t a good that can be efficiently provided by the free market, for reasons that are fairly obvious to anyone familiar with the literature. Nor is this just an academic point. Half a century of experience shows us that national health care works better on nearly every measure than our Rube Goldberg system. It’s not perfect, because nothing ever is. But it would be a big step forward.