Wednesday, January 13, 2010

The health insurance mandate

The proposed health insurance reform includes a "mandate" requiring people buy insurance or pay tax penalties. This incenses people from both the right and the left. On the left, it's annoying to be forced to buy insurance from a profit-making company, thereby subsidizing corporate jets, bonuses and the wimpy corporate boards that protect CEO interests above shareholder interests. However, most liberals/progressives support the mandate if there is a competitive public option health program. On the right, the opposition isn't about the type of insurance, but a more fundamental opposition to any government incursion on our independence - in this case, the idea that the government can force you to buy something you don't want or don't need.  Arguments from the right make it seem that the proposed health insurance mandate is both unprecedented and unreasonable.

Is a health insurance mandate unprecedented? Let's consider car insurance. I suspect that every state has a mandate that every licensed vehicle must carry car insurance or pay a fine. We consider driving a "privilege" rather than a "right," so the mandate seems fairly unobtrusive. The argument could be made that one doesn't have to drive, so one chooses to drive and therefore chooses to abide by the laws requiring insurance. But as a practical matter, how independent is an American that chooses not to drive? Either you must live close to your place of work and walk, risk your life on a bike, or take public transport that is subsidized by the taxpayers. For the vast majority of Americans in urban, suburban, ex-urban and rural areas, driving a car is not optional - its a necessary part of our life due to the way our infrastructure has developed.  Thus, the requirement to buy car insurance is a de facto "mandate," and is a precedent for a health insurance mandate.

Is a health insurance mandate unreasonable? The reason for the car insurance mandate is fairly obvious: through stupidity, carelessness, or simply a bit of bad luck any one of us can cause an accident that leads to another person being financially harmed. Insurance compensates those harmed by any accident we cause. On the face of it, this seems different than health insurance - after all, if I don't carry health insurance how do I harm you? Aren't I just putting myself at risk? Shouldn't I be allowed to be stupid - and wouldn't the gene pool be ultimately improved by allowing this choice? Unfortunately, my choice not to carry insurance does harm you. We have a network of public and private hospitals that receive subsidies based on providing emergency care to any and all who come through the door. If I fall into a seizure in the middle of the street, I will be picked up by emergency medical services, taken to a hospital and treated, even if I do not have any ID or insurance card on me. When I recover consciousness, if I cannot pay and don't have insurance I will still be released from the hospital - we don't have debtors prisons anymore. The cost of my choice to be uninsured doesn't fall on me, it falls on the taxpayers and on those who have insurance that will pay the higher overhead of the hospital that treats the uninsured.

Thus, the argument for the health insurance mandate is fairly simple - we do not have an "opt out" mechanism for emergency treatment, therefore a choice to be uninsured is not a choice for independence, but is a choice to rely on a socialist emergency treatment network.  As the ultimate provider of that socialist network, the citizens, must pay the costs themselves through general taxes, recoup the costs by targeted taxes on the uninsured, and/or reduce the number of uninsured by mandating insurance. Oddly enough, the consistent conservative point of view should be payment through targeted taxes and mandates, i.e. individual responsibility. The consistent progressive point of view should be payment through general taxes, i.e.  the dreaded single-payer system. However, conservatives, presently arguing against the mandate and tax penalties, are actually arguing for emergency health care that is subsidized by general taxes - while the liberals are arguing for tax penalties for those who don't take individual responsibility to get their own insurance.

There could be a compromise (warning - sarcasm follows). We could allow people to avoid the taxes for not buying health insurance if they post an undertaker's bond of $2000 and have a tattoo on their wrist that says "DO NOT TREAT".  We would then tell EMS workers just to leave such people where they lie.  Once they're dead the undertaker can pick them up and collect the bond.   The uninsured by choice could have their independence and our only inconvenience would be having to step over the dead and dying on the sidewalk.

The proposal to tax people for not having insurance is very similar to what happens with people who rent houses.  You aren't required to buy a house, but if you don't buy one you will pay higher taxes than someone who does - and yet no one talks about a "home-owning" mandate in the tax code.


Spencer Daw said...

Hey Ben,

I must say that I truly appreciate being able see articulated what I so vehemently dissagree with. You honestly do a great job of discribing what your position is, not many of your political persuasion can...
Having said that, you've got the mandate all wrong. People who are RESPONSIBLE (you'll note the all caps) and do not carry insurance would pay for whatever emergency room care they recieved if they did not have insurance. Last year, I was one of those people. I went to the emergency room (I should have gone to the Urgent Care, but that's another story) I was unemployed at the time, so repayment wasn't easy. I set up payment terms and paid the fee over time. That my friend, is what we call RESPONSIBILITY. What you are saying (I think) is that people generally will not pay for thier emergency care and thus we all need to pay more insurance (see taxes) to cover them.
Here's where that arguement get's turned on it's head. The people who weren't paying for the emergency room before will still not be paying for the emergency room when this **&%% bill passes. They still won't have money, and having insurance won't help thier behavior. Massachussets, the Presidents favorite example, since the enactment of it's universal health care, have the same number of people going to the emergency room when they could have seen a primary care physician. It's a white elephant Ben(I think I'm using that metaphor right...) There is no there there. We're still going to be paying the same amount for the emergency rooms, the payments are just going to get funneled through your least favorite industry.. Insurance Providers.
I dunno Ben, I just really really don't get it. There truly are free market solutions to this mess that don't involve the gov't take over of health care. Increase the number of providers. Offer grants and incentives for people to become doctors. It's simple supply and demand. If there were more doctors competing, they would be forced to lower thier prices to something reasonable. Make the insurance companies compete by letting them sell across state lines. The whole premise behind this thing is to impose controls that WILL lead to rationing. Do you remember the gas lines of the 70's? It WILL happen with health care under Obama's plan.

So I have a suggestion for your next post. Why is Health Care a Right. You were talking about rights in one of your earlier posts, but you didn't talk about this one.

I look foreward to your response.

Ben said...

Spencer - I'll try to answer more fully as I have time. However, a few comments for the moment - I think you mistake the objective in the blog post. I wasn't trying to justify all of the bill or all of health insurance reform - I was merely trying to point out that 1) the "mandate" is not unprecedented, and 2) the present ability to "opt out" of buying insurance is not a sign of independence but leads to the insured picking up the tab for the uninsured (de facto socialism).

I'm not sure that I get what you are trying to say about responsibility. Is it that only responsible people should have health care and the irresponsible should just curl up and die? Do you have a way to make people responsible that doesn't require coercive government intervention? There will always be irresponsible people.

What if the emergency room last year said you had a chronic disease that is easily manageable, but requires $10,000 every month for treatment? They tell you that you could live another 30 years with treatment. But there is no way they can set up payment terms because the costs are not one-time, they will never stop. Once you have been diagnosed with this disease, an insurance company would be foolish to insure you. Someone else might say that you were irresponsible to not have insurance.