Why Pre-Existing Conditions Are a Tough Issue for the GOP

Republicans are most comfortable citing the perils of interfering in free markets. On this issue, however, they quietly agree that regulation is needed.


Over the weekend, Mitt Romney and his campaign issued several statements on health-care policy, clarifying his stance on people with pre-existing conditions and their ability to get insurance. For those interested in a blow-by-blow account, Kevin Drum and Yuval Levin have details. What interests me is the contrast between Romney's policy and what the Affordable Care Act offers.

Under Obamacare, insurers are flatly prohibited from denying coverage due to preexisting conditions. What Romney proposes is a bit more complicated. To quote the relevant statements:

  • The candidate said one goal of his health-care plan "is to make sure that those with preexisting conditions can get coverage."
  • Said a statement subsequently released by his campaign: "In a competitive environment, the marketplace will make available plans that include coverage for what there is demand for. He was not proposing a federal mandate to require insurance plans to offer those particular features."
  • Finally, a second clarification put it this way: "Gov. Romney will ensure that discrimination against individuals with pre-existing conditions who maintain continuous coverage is prohibited."

Reading these statements in succession lays bare the difficult position Republicans are in on health care. Americans overwhelmingly want people with preexisting conditions to have some way of getting medical insurance, and many worry about one day being in that category themselves.

Contrary to statement number two above, however, the free market doesn't provide for policies of this kind (at least not that anyone can afford). No surprise there. That just isn't how insurance works.

Thus Team Romney's desire to interfere in the free market.

Yuval Levin fleshes out how anti-Obama-care wonks think about pre-existing conditions:

Pre-existing condition exclusions have been illegal in the employer-based insurance market (where the vast majority of privately insured people get their coverage) since the mid-1990s, so they only affect people who are in the individual market or who have gone without insurance for a time. Even in those situations, such exclusions are prohibited in many instances, and are not practiced by insurers in most others, though not all. About 2 to 4 million people are estimated to be vulnerable to such exclusions (though not all of them are in circumstances that mean they actually experience them). That's roughly 1 percent of the population.

That doesn't mean their problem is unimportant (or that other people shouldn't be worried about finding themselves in that group in the future), but rather it means that it can be solved without spending $2 trillion, raising taxes by nearly a trillion, taking $716 billion out of Medicare to fund a new unsustainable entitlement, imposing layers upon layers of new bureaucracies and regulations between people and their medical care, causing millions of families to lose the coverage they have now, and undermining employment, investment, and medical research.

Whatever you think of his various claims about Obamacare, he's right that the pre-existing condition provision is but one part of a sweeping bill. But who has the better policy on the narrow issue of preexisting conditions, as opposed to the larger issue of health policy generally? Obama's approach is easier to understand and won't exclude anyone with a pre-existing condition because at some point they let their insurance coverage lapse. You can see the appeal.

But isn't that approach an intrusion into the free market?

Well, yes. And Republicans would normally lean on that argument. The reason I say they're at a disadvantage in health-care policy is because their own position implicitly presumes that the free market is inadequate. Prohibiting discrimination against folks with continuous coverage is, as anyone can see, an instance of government telling private industry what sorts of policies it can sell.

That isn't to say there's no argument for the Romney approach to preexisting conditions. But it's a complicated case to make, and a departure from the only case that any Republicans speaking to a general audience ever make on health care: that Obamacare is Big Government run amok. In the future, this subject will get even more thorny, because advanced genetic testing will be able to tell us more and more, earlier and earlier, about the illnesses someone is likely to get years later in life. That boon for anticipatory medicine will be a blow to the private insurance model for financing health care, which Republicans are a lot more wedded to than Democrats.

The public will demand new regulations, so that genetically undesirable babies aren't forever blacklisted by insurance companies. The illusion that we'll ever have a free market in health care will be further weakened. I realize that wonks like Levin are already making more complicated arguments for the conservative approach to regulating the health-care industry. In fact, that's what the Heritage Foundation was doing back when it championed the individual mandate. I wonder if what today's conservative wonks are devising will be condemned two years from now as soon as someone declares that their designs interfere with the free market. After all, they do. Perhaps this helps explain why Romney isn't being very specific about his plans.