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Republicans: Underpants Gnomes in Health Insurance Summit

(Image: Bill Ward’s Brickpile under CC 3.0)

Yesterday’s marathon bipartisan healthcare reform summit was interesting, but probably made little progress. There were definitely some areas of agreement. Most notably, Democrats and Republicans agreed that nobody should be denied individual health insurance coverage due to a pre-existing condition. They simply have different ways of going about it.

The problem with their differing methods is that Republicans would like to expand coverage without creating a mandate, which they consider to be unfavorable government intervention in private enterprise and consumer choice. In effect, their proposal is similar to the Underpants Gnomes of South Park fame. For those who have not heard of them, they have a business model that goes something like this:

  1. Steal underpants
  2. ????
  3. Profit!

Obviously, their strategy failed. The view presented by the GOP at the summit fell along those lines:

  1. Ban health insurance companies from denying coverage to people with pre-existing conditions
  2. ????
  3. Access to affordable health insurance for all!

Unfortunately, our health insurance industry doesn’t work that way. Health insurers refuse to cover people with pre-existing conditions because they fear that they will file too many claims and be unprofitable customers. In order to maintain profits for their shareholders, they can only accept those consumers if there is a larger pool of policyholders among which the cost of coverage can be spread around. Some younger, healthier people will continue to drop their individual health insurance plans if not encouraged to keep them. Therefore, as nice as it sounds, health insurance providers will not simply allow everyone to buy health insurance if it causes them to lose money.

A health insurance mandate is not an ideal solution, but there are few other options to accomplish the goal of eliminating barriers based on pre-existing conditions. Others include a government-run public option, or even a full scale single-payer system, which the Republican party is even more opposed to.

Admittedly, liberals have also been accused of using similar logic: that increased public spending on health care will eventually reduce the deficit.

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