his is not my area of expertise.”
That’s the first intelligent thing Jimmy Kimmel has had to say about health-insurance reform.
Kimmel is a late-night comedian and the father of a beautiful three-month-old boy who was born with a congenital heart defect. Kimmel has set himself up as the conscience of the current debate over the last effort at reforming health insurance, and Washington now talks of the “Jimmy Kimmel test,” which demands that insurance companies be obliged to cover preexisting conditions without exception or penalty. Kimmel has on his television program twice called Senator Bill Cassidy, author of insurance legislation under current consideration in Congress, a liar for putting forward legislation that would not treat preexisting conditions the way Kimmel would prefer to see them treated.
We wish the very best to Jimmy Kimmel and his young son, Billy, but holding up cute babies is a dumb way to approach complex policy questions.
It should be noted that the changes considered in the Cassidy bill would have no effect whatsoever on Billy Kimmel, inasmuch as those changes deal with the coverage of preexisting conditions in insurance policies sold on the individual market. Even the most precocious babies are not generally shopping for their own insurance policies from the womb; most of them are, like Billy Kimmel, covered under their parents’ group policies — if they are covered at all. And that latter condition is, of course, what this is really all about.
The question of what to do about preexisting conditions isn’t about insurance companies suddenly deciding that they will not cover this or that medical issue for people who have maintained continuous insurance coverage, but rather is a question about what to do about uninsured people with medical conditions who have decided to seek insurance. The basic architecture of the Affordable Care Act mandates that insurance companies essentially ignore preexisting conditions when writing new policies, obliging them to insure against events that already have happened — essentially requiring them to bet big on the Falcons in Super Bowl LI. This turns insurance on its head: Insurance is a risk-mitigation tool that does not work well when the event already has happened. It creates a perverse incentive: If there is no cost for the coverage of preexisting conditions, then people have no incentive to buy insurance at all until they are sick and need the benefits. In order to mitigate that problem, the Affordable Care Act mandates that every American buy insurance and maintain coverage, a mandate that has not been robustly enforced. That means insurance pools composed of sicker and older populations — which is why we have skyrocketing health-insurance premiums and insurance companies pulling out of markets left and right.
The Affordable Care Act is a poorly designed piece of legislation. It is easy to point to charismatic beneficiaries and conclude that it has been worth the trouble, but everything looks like a winning proposition when you count only the benefits and ignore the costs. In reality, the ACA led to millions of Americans experiencing the anguishing disruption of insurance arrangements with which they are perfectly content. President Barack Obama and his Democratic allies in Congress promised substantial savings from the ACA, but in fact the opposite has been the case. Insurance today is less…
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