You cannot analogize health insurance to fire or casualty insurance. For fire insurance, an occurrence happens, insurance pays for the structure to be repaired, life goes on as though the matter hadn’t happened. When it comes to a preexisting condition in the context of health care, the insurance company (or rather, the health care provider) does not actually make the individual whole. S/he does not put things back the way they were before; rather, the individual maintains that potential for relapse (eg with cancer) or daily need for maintenance care (eg for diabetes) for the rest of his or her life. If you were going to compare this to a fire, it would be like a home catching fire for the next 40 years, with the insurance company putting it out to the point that it’s just smouldering embers, maybe slapping on a new frame and drywall before the home ignites again, and on and on for decades.
What’s more, health insurance covers the gamut of what might befall the human body. To analogize to property insurance, it’s like having one policy to cover fire, flood, general liability, theft, etc. all in one policy (as opposed to having breast cancer insurance, pregnancy insurance, etc.). And the reason we don’t parse out potential conditions and have individual policies for them is precisely because for insurance to work, the pool needs to be as large and actuarially varied as possible. If one were forced to buy different policies for different conditions, people would just buy only the policies they know they are susceptible to needing, the pool wouldn’t include enough low-risk individuals, and the cost of the policy would be too astronomical as a result. Hence under the previous system, a person was paying a much higher amount (if able to purchase at all) if s/he had a preexisting condition like cancer, despite that this condition didn’t put him or her at higher risk for all of the other conditions conceivably covered under the policy.
Now, what this breakdown in analogy tells us — the lesson to be learned from its failure — is not that we’re calling health insurance the wrong thing for people with preexisting conditions. In fact, that’s not much of a “lesson” at all. The lesson is that it’s inappropriate to treat health care like an insurable commodity/service. Since virtually all of us are going to need to use health care services at some point or another, it makes no sense to have a health care insurance system at all. The whole damn thing needs to be a “social safety net” program — in other words, a single payer system. We’re the wealthiest country that has ever existed; we can do that. We just don’t have the political will or appropriate leaders.
Now, one of the things that would absolutely need to be done in coordination with such a system would be a systematic public education, preventative care, and wellness program (nudging works too) to address the grotesque lifestyles of average Americans. There are very effective techniques for modifying bad behavior that can be deployed like the SBST, if we could get those on the right to stop freaking out about the plain fact that such programs work and do not diminish individual choice in the slightest. We also need to address the insane wealth disparity in this country, which would also require a communal acknowledgment that those who have achieved unspeakable financial success are responsible for paying a more reasonable share of taxes.
All of this to say, we need a new legislative overhaul, something as bold as the New Deal, that takes all of these things into account and is implemented on an incremental, reasonable basis. It’s doable.