Romney, Obamacare And Pre-Existing Conditions: The Key Difference

Fresh off his introduction at the Republican National Convention, Mitt Romney has touched off the latest media tempest by suggesting he would keep parts of the reviled (by the party he has been selected to lead) Affordable Care Act.

Of course, there are a number of things that I like in health care reform that I'm going to put in place, Romney said on Meet the Press. One is to make sure that those with pre-existing conditions can get coverage.

The walkback began shortly thereafter, with a Romney aide reassuring the National Review online that the Republican nominee's health care stance was still governed by deference to the free market.

In a competitive environment, the marketplace will make available plans that include coverage for what there is demand for, the aide told the National Review. He was not proposing a federal mandate to require insurance plans to offer those particular features.

In a subsequent update, the National Review cites a Romney aide who added that Romney would ensure that discrimination against individuals with pre-existing conditions who maintain continuous coverage is prohibited.

The continuous coverage piece of that statement is crucial, and it underscores the defining difference between President Obama's health care overhaul and Romney's blueprint for extending coverage to more Americans.

Romney elucidated his plan in a June speech stressing a consumer oriented health care marketplace. Romney also spoke out against denying coverage to people with pre-existing conditions, embracing one of the most popular aspects of the Affordable Care Act. But he also invoked the principle that the safeguard against being denied insurance would apply only to Americans who were continuously insured.

Let's say someone has been continuously insured and they develop a serious condition, and let's say they lose their job or they change jobs, they move and they go to a new place, Romney said. I don't want them to be denied insurance because they've got some pre-existing condition.

So people who have insurance and then lose it would be safe. But that doesn't address the millions of Americans who never had insurance in the first place and only try to obtain it once they get sick.

This is where the individual mandate comes in. Republicans have portrayed the requirement that all Americans obtain insurance as the epitome of big-government intrusion, forcing Americans to pay for something against their will.

But that piece is essential to give insurance companies the financial cushion they need to offer coverage to people with pre-existing conditions. Otherwise, insurance firms would argue, it is simply too expensive to cover people who wait to buy insurance until they need it. By furnishing insurance companies with large numbers of new customers, the Affordable Care Act offers the insurance industry enough new revenue to offset the cost.

That's why Romney's promise that the market will level things out sounds dubious to supporters of the Affordable Care Act. Insurance companies have barred people with pre-existing conditions from getting coverage precisely because, in an unfettered free market, it is unprofitable to do so.