Monday, October 22, 2012

YoungerCare, RomneyCare, and ObamaCare

(Mark and Ash; Photo credit: Julie Aleman via Facebook)

Mark and Ash  are not the faces of the uninsured.  With degrees in engineering, business, public policy, nursing, and public health, they are the faces of the exhaustively educated and eminently employable.  Their story of scrambling for coverage then, reveals just how unaffordable healthcare is without insurance, and how close uninsurance can hit.

Shortly after their dual graduations from Harvard in 2010, the Youngers found themselves in a pickle.  Before they moved halfway across the world for Mark’s new job, they needed 6-months in California to tidy up affairs—mastering hot yoga (M); not-mastering embroidery (A); and most importantly, gestating (A).  Though they were young, healthy, and had a job in hand—3 markers of being low-risk insurers like in their beneficiaries— Ash’s pregnancy was considered a “pre-existing condition” and cause for denial even if she was previously insured.  They did not qualify for Medicaid.  And though ObamaCare promises an end to coverage denials like these, the clause does not kick in until 2014.

Public Health cares about insurance because it is a gateway to healthcare in the US.  It provides ease of mind, encourages healthy behavior, and mitigates the consequences of disease when they occur.  Insurance may not guarantee good care, but it is the first step toward care.  Given the high value of coverage, insurers are wary of people with pre-existing conditions because they’re so expensive: women who are preggers are almost guaranteed to have physician visits, tests, and a hospitalizations.  All those things cost money.  

(Offspring #1 and Offspring #2; Photo credit: Ashley Younger via Facebook)
 Lucky for Mark and Ash, though Californian insurers weren’t accommodating, Massachusetts guarantees coverage regardless of pre-existing conditions.  Massachusetts insurers could afford to do this because of the “individual mandate” put in place by RomneyCare ‘06.  By requiring everyone in the state to have insurance, the mandate widened the pool of people sharing risk, lowering the cost of covering expensive people.  ObamaCare works with a similar mechanism that is not yet in effect.  As for what RomneyCare ’12 will bring, Governor Romney has threatened to repeal all of ObamaCare.  He has also promised to cover those with pre-existing conditions provided that they have continuous coverage, but has provides few additional details on how his plan would cover such individuals (see this guide to pre-existing conditions for more info).

Mark and Ash never expected to be uninsured.  And thanks to RomneyCare ’06 (which was a model of ObamaCare), they didn’t have to be.  Rather than worry about how they’d pay for the birth of Offspring #2  (which came to over $30K for a “nothing fancy,” straightforward delivery), they could focus on other things, like how Duke + Harvard left them so poorly prepared for simple games like Boggle. 

Policy Implication:  The individual mandate is one solution to expanding coverage while avoiding adverse selection.

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