Why Should Insurance Cover Pre-Existing Problems?
President Obama: A recent report actually shows that, in the past three years, over 12 million Americans were discriminated against by health insurance companies because of a pre-existing condition.
MP: Doesn't this demonstrate a basic misunderstanding on the part of President Obama about how private insurance markets work? Consider these examples:
1. You call the State Farm Insurance Company to purchase homeowners insurance the day after your home has been damaged by hail, a flood, a fire, an earthquake, a tornado; or has just been burglarized. Would you expect State Farm to cover those "pre-existing conditions?"
2. You call State Farm the day after your car has been in a major accident, and inquire about getting a quote for car insurance, hoping that your extensive "pre-existing body work" will be covered?
3. You call AAA on your cell phone from the side of the road with a flat tire, and ask about signing up for towing insurance, hoping that your "pre-existing" condition will be covered, and could they please send out a tow truck right away to fix your flat tire?
4. You are offered an extended warranty for your new bigscreen TV at BestBuy, and you decline. A month later, you have major problems with your TV and go back to BestBuy and ask if you can now buy that extended warranty, hoping it will cover your "pre-existing" electronic problems?
If the pre-existing conditions wouldn't be covered in those four examples, why would we expect that health insurance companies should, or would cover pre-existing medical conditions? That's not discrimination, that's just the way insurance markets work.
Originally posted at Carpe Diem.
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