In a FOX News op-ed published on Tuesday about repealing Obamacare, something he said the House GOP health care bill did not do, Senator Rand Paul said that the political obsession with forcing insurance companies to cover pre-existing conditions for medical conditions is equivalent to requiring life insurance companies to cover people who have already died.
Understanding insurance, Sen. Paul appropriately makes the logical case that it’s not possible to insure against a risk that has already happened, as Obamacare has done which and has caused prices of health insurance and deductibles to unnecessarily skyrocket.
“If Congress really wanted to fix our rotten insurance system, they would first have to understand the problem. I hope to be part of helping them do that as the bill moves to the Senate,” Paul, stating that insurance only works against a future risk that has not yet happened.
“Insurance, historically and logically, only works if you are buying insurance against some event that is unknown but whose occurrence can be predicted with some accuracy. It also works best if you are spreading the risk among a large pool of people. Both of these issues can be addressed in the Senate version of the bill.
A pool of people can buy insurance against death as long as they are not yet dead. But wouldn’t life insurance go sky high if you developed a serious “pre-existing” condition? Absolutely, but the purchasers protect themselves by buying multi-year policies.
So, life insurance is often purchased for 20 years, and if you become sick during that 20 years and the risk of you dying increases, the insurance company bears that risk, not you. That’s how health insurance should work.”
Rand Paul’s analogy is an accurate one — as is forcing car insurance companies to write new policies on cars that have just been totaled or homeowners insurance for houses that have already burned to the ground.
It’s absolutely ridiculous to think this absurd type of arrangement would work. Democrats and the media realize this, of course, which is why they’re obsessed with covering “pre-existing conditions.” They know it will destroy the health insurance market — as Obamacare has effectively done — which will lead to what they ultimately want, complete socialized medicine, or as they call it, “single-payer.”
To his credit, Paul doesn’t leave those with pre-existing conditions out to dry — he’s not cold and heartless for understanding market forces.
“Could health insurance work that way? Yes, but only if we allow the consumer to be in charge again.
Health insurance is so regulated that competition, innovation, and change are stagnant. No new product is introduced. No market forces force change.
But the ability to band together in buying pools will allow consumers of health care to demand it. That’s the only way we will have change. I think it is quite clear the insurance companies will NEVER, out of the goodness of their hearts, offer such a product.”
Sen. Paul says that his Senate Bill 222 proposes legalizes what he calls nationwide Association Health Plans which would allow organizations like the NRA or credit unions, for example, to offer plans to their members very similar to the kind of plans offered by employers. He contends that these associate plans would allow members banded together to form a buying group that will be able to negotiate lower prices with health care insurers.
“Capitalism, competition, and freedom do work!” Sen. Paul exclaimed. “But only if government gets out of the way. If consumers have choices – and power – we can go a long way toward fixing our problems,” he noted.