Imagine that you live in a world with no medical insurance, you take the risk to start the first insurance company, and The Road to Socialized Medicine Is Paved With Preexisting Conditions, Part 2. (I also recommend part 1)springs up. Then a customer walks in to your office and wants you to sell him insurance. He has pre-existing conditions, but expects that you sell him a policy at the same price as more healthy people. Yaron Brook and Dan Watkins explain the absurd implications of this at Forbes.com:
Brook and Watkins do a good job of explaining alternatives to community rating, such as health status insurance, and exclusion waivers (a.k.a. medical waivers) that do not cover a pre-existing condition.
One rebuttal to their article is that all insurance companies would be barred from charging the same premium. It’s called “to avoid such customers – to design their products and customer service to drive them away..” So this would not put any company at a disadvantage. OK, but what effect would this have on how insurers cater to customers with pre-existing conditions? It would encourage insurers
Imagine if obese people lobbied to force airlines to charge the same for wider, first-class seats as coach seats. How would airlines respond? They’d probably get rid of the wider seats.