ANDREW S. BREM
Congressional Republican leaders are in the midst of floating yet another health-care bill to replace the Affordable Care Act (Obamacare). This latest effort would allow insurance companies to offer policies that exclude benefits for specific conditions, such as maternity care. The thinking here is that by excluding a benefit like maternity care, insurance premiums will be less expensive, especially for older Americans who are buying health insurance on the individual market and are not in need of these benefits for themselves.
Pause a minute and consider what kind of precedent this benefit exclusionary principle would make. Women make up about half the population and therefore half the insurance pool. Gender or age specific exclusions could easily create chaos in the insurance market.
If, for example, maternity care were excluded as a benefit, medical care for women would suffer because of decreased access to that care. Moreover, women would be justified in demanding health insurance policies that exclude coverage for male-specific conditions like prostate cancer and/or prostatic enlargement.
Younger men, who are at low risk of prostatic disease, also might opt for such a policy on the grounds that eliminating an expensive benefit would lower their premiums too.
The risk pool for people buying a health insurance policy covering prostatic diseases would be reduced to men over 45, the very people likely to be affected by prostatic problems. The net result would be a likely reduction in access to medical care for men over 45 and a marked increase in premium costs for these same patients. One can easily adapt this argument to many other gender and age related conditions.
What might be the effect of a benefit exclusionary principle on the health insurance industry? Writing policies omitting coverage for this condition but not that disease would be cumbersome and expensive. Actuaries would have to calculate the size of each insurance risk pool for each of the benefit exclusions (the remaining population requiring coverage) and the actual risk (patients who need the service) involved. Confusion and cost would both rise, prompting many insurance companies to abandon the health-care business altogether. This decrease in competition would further increase premium costs.
The logical approach is to spread the risk over the largest insurance population pool possible and thereby lower premium costs for the individual policyholder. Medicare mandates everyone eligible over 65 to sign up and the Affordable Care Act tried for universal enrollment. Both are examples of large population insurance pools, which result in lowering individual premium costs.
Exclusionary coverage ends up inflating costs rather than lowering them and exclusionary coverage is just a bad idea both medically and economically.
— Andrew S. Brem, M.D., is an emeritus professor of pediatrics at the Alpert Medical School at Brown University.