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Pre-existing conditions unfortunate, but should not be covered


John has an unfortunate story. He and his wife want to start a family, so they began searching for a house. The house they end up buying has a few problems, but it is a good starter house. The roof leaks, the cabinets need to be replaced and the foundation has some problems.

After buying the house, like any responsible couple, they shopped for home insurance. They were told that the foundation will need to be repaired within the next year, so no insurance plan would cover the home’s foundation at a price John could afford.

This makes business sense from the side of the insurance company. Because insurance is based on calculating risk, the company does not want to take on coverage of a home that is guaranteed to need repairs.

If John can only pay an insurance premium of $1,000 a month, then he will not receive coverage for a repair that will cost $20,000 almost immediately. Why not? Let’s analyze.

If John purchases the home and insurance in January and four months later needs the foundation to be repaired, he has paid the insurance company $4,000. That means that the insurance company is down $16,000. If John drops his coverage after the repair, then the company loses that money. If he stays with the company, then the company doesn’t break even until August the following year, assuming no other repairs were needed.

John will either have to pay a higher premium or have to choose not to cover his foundation. Of course, the insurance company has the option of keeping John’s premium at $1,000 while slightly raising other customers’ premiums to compensate, which is unfair to the other customers.

Compare John’s situation with Jane’s. Instead of home insurance, Jane is shopping for health insurance. However, she has a pre-existing condition that will require a high amount of medical expenses in the near future.

Like John, the insurance company does not want to cover Jane at a normal rate. Instead, they want to either charge her a higher premium or not cover her altogether.

With the Affordable Health Care for America Act, insurance companies will be forced to cover Jane, no matter the pre-existing condition, at a rate that she can afford. As a result, the insurance company will be paying out far more than it is taking in on Jane.

Because insurance companies are businesses, they want to make up the lost money on Jane. They do so by raising premiums on other customers. While Jane’s situation may only affect the other customers slightly, there are thousands of others in Jane’s situation, meaning that each premium will be slightly affected thousands of times.

While many feel sorry for John, they would not push for the insurance company to cover him at $1,000 a month. However, they will push, and even force, the insurance company to cover Jane.

Both home and health are considered necessities in America, and we know that unfortunate situations do arise. In the end, though, we should not believe that everyone should pay for others’ misfortunes.


Trenton Winford is a sophomore public policy leadership major from Madison.