Consumer Confidential With David Lazarus
Column

Republicans should gladly pay for my preexisting condition

It’s a question I encounter frequently when I discuss healthcare with conservatives, particularly after I note that I have a chronic and costly preexisting condition, Type 1 diabetes.

“Why should I pay for your healthcare?” they ask.

The question came up again the other day as I awaited an overpriced latte at a Hollywood coffee shop. A fellow patron recognized me (always flattering) and struck up a conversation about the latest Republican effort to repeal and replace Obamacare.

I totally get where conservatives are coming from, especially in this “America First” era where the interests of others are a secondary consideration. And it’s a fair question.

I’m the one with the disease, after all, and I’m the one facing thousands of dollars in annual medical costs. How is that anyone else’s problem?

“Conservatives are right that there is an income transfer,” observed Resul Cesur, a healthcare economist at the University of Connecticut. “But Republicans can be very short-sighted, and the results can be catastrophic.”

Preexisting conditions are once again a thing as Republican senators ponder the fate of legislation known as Graham-Cassidy, which would not just kill Obamacare but go further than any previous GOP bill in reshaping the U.S. healthcare system.

It appeared Monday that the bill was doomed after Sen. Susan Collins of Maine joined Arizona Sen. John McCain in saying she wouldn’t support the legislation. But you never know. GOP repeal efforts have an alarming, zombie-like habit of rising from the dead.

Also Monday, the Congressional Budget Office said in a preliminary evaluation of the legislation that "the number of people with comprehensive health insurance that covers high-cost medical events would be reduced by millions."

Among other things, Graham-Cassidy would slash funding for Medicaid and insurance subsidies. It would do away with Obamacare’s requirement that almost everyone buy coverage and give states the power to allow insurers to offer less-comprehensive plans.

While the main authors of the bill — Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana — insist their legislation protects people with preexisting conditions, the reality is that coverage for such folks in the individual insurance market would become increasingly out of reach.

Doing away with the insurance mandate means there’d be no reason for younger and healthier people to buy coverage until they need it. This would cause premiums to soar for everyone else.

Graham-Cassidy requires that coverage for people with preexisting conditions be “adequate and affordable,” but it doesn’t say what that means. Nor does it include Obamacare’s explicit requirement that all people be charged the same, regardless of health.

The bottom line is that sick people almost certainly would pay more for insurance under Graham-Cassidy, perhaps causing millions to forgo coverage. Millions more could end up underinsured, meaning they’d lack sufficient coverage for their medical needs.

The guy at the coffee shop was thrilled with the legislation. The government has no business telling him what to buy, he insisted, and he shouldn’t have to pay more to cover sick people. He knew I had diabetes and said he was sorry for me, but that wasn’t his lookout.

“The Greeks had a word for this — hubris,” said Gerald Kominski, director of the UCLA Center for Health Policy Research. “The idea that you shouldn’t have to pay for other people’s health insurance because you’re healthy, that’s just insane. Bad things can happen to anyone.”

He added: “I’m a good driver. But I still need to have automobile insurance. Just in case.”

What conservatives overlook is that insurance isn’t about healthcare or car crashes or damage to the home. It’s about risk management. It’s about mitigating risk for the greatest number of people at the lowest possible cost.

“The healthy person is subsidizing the unhealthy one,” said Allen Goodman, a healthcare economist at Wayne State University. “That's the straight economic argument.”

At its most efficient, a healthcare risk pool includes the entire population — young and old, sick and healthy. This is how other developed countries do it with variations of single-payer insurance systems that guarantee affordable coverage to all.

“If there is a 1 in a million chance of a bad thing happening, it makes sense for a million people to come together and pool their risk,” said Guy David, an associate professor of healthcare management at the University of Pennsylvania’s Wharton School.

The Graham-Cassidy bill seems to envision what economists call a segmented insurance market that separates the healthy from the sick. For young and healthy people, this is beneficial because costs are lower.

For those with medical issues, a segmented market guarantees sky-high premiums and high deductibles because their costs aren’t offset by premiums from the more fortunate.

“It is clear that individuals who are healthy might benefit financially from a risk-segmentation approach when they are healthy,” said David Grabowski, a professor of healthcare policy at Harvard Medical School. “In the short run, they don’t have to pay for someone else’s healthcare.

“However, we know that one’s health — and the health of one’s family members — can change quickly,” he said. “An approach that shares risks across the healthy and the sick protects the healthy should they become sick.”

There it is.

Health insurance — all insurance — isn’t intended to reflect where you are in life. It’s intended to anticipate what could happen in the future.

“If you end up in the unlucky situation of getting cancer, you will be relying on other people to cross-subsidize your care, and you will be glad of it,” said Ashley Hodgson, an associate professor of economics at St. Olaf College in Minnesota.

So to my new friend from the coffee shop as well as to all conservatives: that’s why you pay for my healthcare.

Because I’m gladly paying for yours.

And you want that.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.

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