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Column: Since lawmakers now agree on protecting people with preexisting conditions, here’s how you do it

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Despite what some might insist, it’s not complicated providing affordable health coverage to the greatest number of people. It’s just not easy.
(TNS)

Healthcare stocks led the stock market lower Monday amid uncertainty over the future of Obamacare after a Texas judge, in his conservative wisdom, decided to throw out the law and possibly strip coverage from millions of people.

Most news stories have focused on the political bind this creates for Republican lawmakers, who loudly declared during the midterm election that they’ll protect people with preexisting medical conditions despite having spent years trying to take those protections away.

What nobody is talking about is what measures are necessary to guarantee that anyone who wants health coverage can get it at an affordable price — the core goal that Republican and Democratic politicians now say they agree on.

As a great American statesman once said, “Nobody knew healthcare could be so complicated.”

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In fact, everyone with even a rudimentary knowledge of risk management has known for decades that providing affordable health coverage to the greatest number of people is an enormously tricky business.

The problem: It requires a commitment to public welfare that is frequently lost on independent-minded, what’s-in-it-for-me Americans.

“If this were easy, we’d have gotten there a long time ago,” said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute.

“All the options involve trade-offs,” she told me. “Politicians need to determine what those trade-offs should be and who the winners and losers are.”

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U.S. District Court Judge Reed O’Connor ruled Friday that when Republican lawmakers repealed the mandate that everyone buy health insurance, the Affordable Care Act became unworkable and therefore the entire law is invalid.

Although many legal scholars say this was a poorly reasoned decision that won’t withstand appeal, the ruling has created uncertainty in the individual insurance market — that is, the marketplace for tens of millions of people who do not receive group coverage from an employer or similar organization.

If it stands, the decision not only would do away with safeguards for people with preexisting conditions but also eliminate Obamacare’s “essential health benefits,” which include prescription drugs, maternity and newborn care, and mental health treatment.

President Trump, the aforementioned statesman who repeatedly has demonstrated a lack of awareness of healthcare’s complexities as well as an unwillingness to provide leadership on the issue, crowed on Twitter that last week’s ruling was “great news for America!”

He said it means that “we will get great, great healthcare for our people,” although, as usual, he didn’t say how this would happen.

Trump’s only guidance to lawmakers: “Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!”

That would be Senate Majority Leader Mitch McConnell and House Democratic leader Nancy Pelosi. As we all know, they’ve shown enormous eagerness in the past to cooperate on difficult, politically dangerous, bipartisan legislation.

The harsh reality is that if you’re serious about providing affordable coverage to people with preexisting conditions, there aren’t a lot of ways to do it.

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Moreover, each approach requires an element of shared sacrifice that Americans in general and conservatives in particular find unpalatable.

“We need government regulation and near universal participation for health insurance markets to work and coverage to remain affordable,” said Dana Goldman, director of the USC Schaeffer Center for Health Policy and Economics.

One way to make it work is what Obamacare tried to do from the get-go: Spread the risk of the sick as widely as possible by requiring everyone to have coverage — the mandate that conservatives can’t abide.

Without such a requirement, younger, healthier people naturally would forgo coverage until they need it, leaving insurers to cover primarily older and less-healthy people.

This inevitably drives up premiums because insurers can’t offset claims with payments from people who don’t yet need protection.

If lawmakers want to guarantee coverage for people with preexisting conditions and do so at affordable rates, they have to get healthy people into the risk pool. Restoring the individual mandate does that.

An even more effective method would be to create such a large risk pool that claims from the sick represent a manageable expense relative to overall revenue. Other developed countries achieve this through different types of single-payer systems that guarantee coverage for all.

In the United States, that could be done through a Medicare-for-all approach, which many Democrats favor but Republicans believe is tantamount to socialism.

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However, conservatives can’t quite articulate why Medicare for 57 million current beneficiaries is a good thing but having millions more people paying into — and financially stabilizing — the program would be a disaster.

Other options for covering people with preexisting conditions are dodgier because they can be very expensive.

One method would be to create high-risk insurance pools solely for the sick. While this has the merit of keeping premiums down for healthy people, it means costs will soar for those in the system. That, in turn, would necessitate massive government subsidies to reduce monthly premiums.

All you’ve really done there is shift the financial burden from ratepayers to taxpayers, and lost the opportunity to lower costs via economies of scale.

A third option would be to create a pool for catastrophic health coverage similar to earthquake insurance available to California homeowners. The downside is that, as with quake insurance, rates and deductibles would be so high that many people wouldn’t buy policies.

“We’ve tried that at the state level,” said Vivian Ho, director of the Center for Health and Biosciences at Rice University’s Baker Institute for Public Policy. “They didn’t work very well.”

A better, more equitable solution, she said, is that “we mandate and pull everyone in to purchase health insurance.”

The bottom line is that healthcare isn’t as complicated as some would like to think.

It just requires hard choices.

Republicans and Democrats apparently agree that people with preexisting conditions can’t be left to the cruel vagaries of an unregulated market. They need the government’s help.

OK, so do your jobs.

There’s no mystery to what you have to do.

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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