BY WALTER WILLIAMSSen. John Rockefeller, D-W.Va., chairman of theSenate Finance Subcommittee on Health Care,and Rep. Joe Courtney D-Conn., a member of theHouse Education and Labor Committee,have introduced the Pre-existing Condition Patient Protection Act,which would eliminate pre-existing condition exclusions in all insurance markets.That's an Obama administration priority.I wonder whether President Obama and his congressional supportersrealize such an law would protect not just patients but everyoneagainst pre-existing condition exclusions by insurance companies.A person might save quite a bit of money on fire insurance.He could wait until his home is ablaze and then walk into Nationwide and say,"Sell me a fire insurance policy so I can have my house repaired."The Nationwide salesman says, "That's lunacy!"But the person replies,"Congress says you cannot deny me insurance because of a pre-existing condition."This mandate against insurance company discrimination would not only applyto home insurance but auto insurance and life insurance as well.Instead of a wife wasting money on costly life insurance premiums,she could spend that money on jewelry, cosmetics and massages and thenwait until her husband kicked the bucket to buy life insurance on him.Insurance companies don't stay in business and prosper by being stupid.If Congress were to enact a law eliminating pre-existing condition exclusions,what might be expected?Say I'm a salesman for Nationwide and you demand that I write youan insurance policy for your house that has already gone up in flames.I send an appraiser out to your house to get an estimate how muchmoney it would take to make you whole.Let's say it comes to $400,000.Guess how much I'm going to charge you for the policy?If you said somewhere in the neighborhood of $400,000,you'd be pretty close to the right answer.You might say, "Williams, you're right.Forcing fire and auto insurance companies to sell policies fora pre-existing fire or auto accident is bizarre and stupid,but it's different with health insurance."Yes, health insurance is different from fire and auto insurancebut the insurance principle remains the same.If Congress and the president are successful in making thePre-existing Condition Patient Protection Act the lawof the land, their treachery won't stop there.Insurance companies will attempt to charge people with pre-existinghealth conditions a higher price to compensate for their higher expected cost.Those people will complain to Congress.Then Congress will enact insurance premium price controls.Insurance companies might try to restrict just what treatmentsthey will cover under such restrictions.That means Congress will play a greater role in managing whatinsurance companies can and cannot do.The dilemma Congress always faces, when it messes with the economy,was aptly described in a Negro spiritual play by Marcus Cook Connelly titled"Green Pastures."In it, God laments to the angel Gabriel, "Every time Ah passes a miracle,Ah has to pass fo' or five mo' to ketch up wid it," adding, "Even bein God ain't no bed of roses."When Congress creates a miracle for one American,it creates a non-miracle for another.After that, Congress has to create a compensatory miracle.Many years ago, I used to testify before Congress, something I refuse to do now.At several of the hearings, I urged Congress to get out of the miracle business andleave miracle making up to God.For a president and congressman to shamelessly propose something like thePre-existing Condition Patient Protection Actdemonstrates just how far we've gone down the road to perdition.The most tragic thing is that most Americans have no ideathat such an act violates every principle of insurance and it'ssomething that not even yesteryear's lunatics would have thought up.Walter E. Williams is a professor of economics at George Mason University.
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Public Option, only.
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