Pre-existing condition insurance?

This morning's second hour of Forum was about California's Governor Schwarzenegger's health care proposal. They had representatives from both sides of the issue: those supporting the Governor's proposal but thinking it should go a little bit farther, and those supporting single payer health care. (This show is the single largest reason I'm not a member of KQED.) Actually, it's possible they had other points of view but I arrived at work before they were on. The other point of view would probably be someone saying we shouldn't cover the poor or some other view that nobody would listen to.

One of the issues they brought up was the problem of pre-existing conditions: people stuck in their jobs or who can't get coverage because they're in remission from cancer or whatever. This reminded me of the problem that employment, while a somewhat "natural" way to pool health care coverage, is by no means ideal, particularly with the workforce becoming more and more mobile. The solutions proposed by most people are portability and single payer. But with each of those, you're still stuck with a single plan and can never move plans. In the former case, sick people are stuck in their plan, though the law could require that a new plan treat them as if they were part of a group if they'd had coverage previously. The latter sticks *everyone* with the same plan and would cause me to move to another state if I couldn't opt out.

Here's a potential solution: why shouldn't life insurance pay for any condition that would cause health care coverage to be hard to get? They already pay for dismemberment, and the actuarial tables are well established for various medical conditions or could be easily expanded to encompass them. Your life insurance plan could simply pay a lump sum based on the exact condition. The sum would obviously come out of the total payout at the end of your life the way dismemberment payouts do, but instead of being compensation for lost productivity it would pay for future health care, whether it's a high-risk health plan or direct payment for treatment.

Someone with this sort of plan could have a much lower maximum payout for their health care coverage or have a plan that would "kick them out" if they were diagnosed with one of the conditions covered by the other plan. The lower premium for their health care coverage would probably more than pay the "preexisting conditioin" plan's premium.

Unfortunately, this sort of thing is not likely to happen in California's heavily regulated insurance industry. They've regulated insurance innovation into oblivion here. Single payer health care seems far more likely.

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