Bill Cutshall’s Weblog

December 22, 2008

You’re DOING IT WRONG! – Health Insurance

Health insurance has been a big topic of discussion lately and more and more we get to hear the opinions and experiences of individual Americans expressed in the mass media.  For the most part I understand people’s frustrations over in-network/out-of-network services, high co-pay amounts, paperwork nightmares, and outright fraud and deception executed by insurance companies in their payment policies.  What gets not only my goat but also an undue amount of airtime, however, is frustration over exclusion of “pre-existing conditions”.  Here’s the thing:

If you wait until you are sick before you get health insurance, you’re DOING IT WRONG!

The particular story that really drew my attention was a gentleman that called in to a radio show to complain that he was unable to get health insurance coverage for his pregnant wife.  Specifically, his uninsured wife got pregnant and every health insurance company he talked to considered her pregnancy to be a pre-existing condition and  would not extend coverage to her for those costs.

So where is he supposed to get health care for his wife if no insurance company will cover her?

Let’s get this straight right away; health insurance and health care are two completely different things.  Health care is doctors and nurses and hospitals with machines that beep and medicine and a lot of things that fix you when you break (or get pregnant).  Health insurance is a sort of safety net that pays for things that you might need in case you break (or get pregnant).  The thing about safety nets is that they only work if they are in place *before* a fall.

Our man with the pregnant wife can get health care at the same place everyone else gets it, from doctors and hospitals and clinics and pharmacies.  It’s pretty expensive though.  Honestly it’s really expensive.  I wouldn’t recommend that anyone buy health care this way.  Luckily there is an entire industry that specializes in helping people cover the costs when bad things happen to them, the insurance industry.

Why do I have to have insurance before I get sick? Why won’t insurance companies  cover pre-existing conditions?

Insurance companies won’t cover pre-existing conditions for the same reason that casinos won’t allow you to bet on Roulette after the ball stops rolling.  Casinos are in the business of making money from gambling and once the ball stops rolling everybody knows the outcome and it is no longer a gamble.  Similarly, insurance companies are in the business of insuring healthy people against costs incurred once they get sick.  Complaining about pre-existing conditions being excluded when you try to buy insurance is like complaining about not being able to place a bet after you know the outcome.

People seem to be clear that a car insurance company will not fix their car unless a policy is bought before an accident.  There is no confusion over whether or not buying fire insurance after your house burns down will cause anyone to cut a check to you.  Nobody believes that you can buy a life insurance policy on someone that is already dead.  For some reason, however, some people are still confused about why they can’t buy a heath insurance policy after they get sick (or pregnant).

The confusion may arise from the rules regarding pre-existing conditions during a change of insurance providers.  Simply put, if someone has health insurance coverage at the time they contract a long-term illness (any health issue counts but long-term is better for this example), any new insurance company is required to cover that condition should they (or their employer, for instance) decide to change providers.  If, however, the insured allows their policy to lapse and thus becomes uninsured, all conditions will be considered uncovered and no insurance company will be required to cover them.

The long and short of it is that you should buy insurance when you aren’t sick if you want to have it when you are.

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