Should insurers cover pre-existing medical conditions? A controversial yet crucial question that has been debated for years. The answer, it seems, lies in understanding the delicate balance between risk management and accessibility.
Let’s dive into the world of insurance, a realm where risk-averseness is key for both buyers and sellers. Buyers, or clients, seek to protect themselves from sudden financial burdens caused by unforeseen events. They opt for insurance, paying a small premium to avoid potential debt. Insurers, on the other hand, must ensure their business remains profitable, striking a balance between financial risk and payouts.
Here’s where it gets tricky: insurers practice risk-selection to minimize potential losses. They tend to choose individuals they perceive as low-risk, which often results in fewer payouts. But what happens when individuals with pre-existing medical conditions enter the picture?
In the realm of medical insurance, insurers face a challenging dilemma. They must decide whether to exclude these individuals altogether, deny claims related to their pre-existing conditions, or charge higher premiums to mitigate the increased risk. This is the core issue that has plagued medical insurers globally, leading to a restricted ‘risk pool’ and limited access for many.
And this is the part most people miss: despite these barriers, the risk pool often doesn’t remain as low-risk as insurers initially hope. Unknowing, undiagnosed individuals can enter the pool, creating a small, financially unviable pool that many cannot access.
So, what’s the solution? It might seem counterintuitive, but allowing individuals with pre-existing conditions to enter the risk pool could be the answer.
Take the example of the American health insurance system. For decades, the US struggled with a significant portion of its population uninsured, leading to equity issues and poor health outcomes. That changed with the Affordable Care Act, or Obamacare.
Obamacare removed barriers for individuals with pre-existing conditions, ensuring everyone could buy insurance without facing loading or exclusion. Insurers were prohibited from denying coverage, and the government mandated that all individuals purchase insurance or pay a penalty.
The results? A significant drop in the number of uninsured individuals, decreased income inequality, and most importantly, a reduction in total healthcare spending with stabilized premium prices.
Despite having an increased number of people with pre-existing conditions in the risk pool, the system remained stable. The key, it seems, was ensuring that everyone subscribed to the risk pool, including low-risk individuals, thus widening the pool and ensuring its financial viability.
In a market like Malaysia, driven by private medical insurance, government intervention is crucial to reshape the medical insurance market and ensure accessibility for all.
The question remains: is our government ready to take decisive action? The future of medical insurance and the well-being of our society depend on it.
What are your thoughts on this matter? Feel free to share your opinions and engage in a constructive discussion in the comments below!