James Oliphant writes in the Chicago Tribune that the mandate is being opposed by many progressives as well as most conservatives. The article does a good job of presenting both sides of this argument. Here’s part of the pro-mandate argument:
The justification for the mandate seems simple: It reflects the basic concept underlying all insurance. A large number of people pay relatively modest premiums, creating a pool of money big enough to take care of those who need help. Having people of all ages participate is especially important with health care, analysts note, because the medical problems that result in big claims are found disproportionately in middle-aged and older Americans.
If younger, healthier people go without insurance, premiums for the others would be driven higher.
The objection is that, especially without the public option, people are going to be forced to purchase increasingly unaffordable insurance and thereby enrich the insurance industry.
To which the pro-mandate side might respond that insurance is becoming increasingly unaffordable as it is, and those who go without insurance not only put themselves at terrible health and financial risk, they are also driving up the cost for everyone else, because health care bills that are paid get jacked up to pay for people who can’t pay.
As it is, there is some incentive for young and healthy people to get insured, because once they have a pre-existing condition they may not be able to purchase insurance. However, under the current bill, beginning in 2014 insurance companies will no longer be allowed to refuse to take a customer because of his pre-existing conditions. This would make it a lot easier to just put off getting health insurance until one begins to need health care beyond an annual flu shot.
But that would be a disaster for the people who are paying for insurance, because if younger, healthier people are not paying into the risk pool, there are more claims against fewer dollars. And the cost of insurance goes up.
There is a real concern that people are going to be required to buy policies they cannot afford. However,
Under the Senate bill, all a person would have to do is pay $750 per year or 2 percent of household income, whichever is greater, in order to avoid the mandate. The House penalty is slightly higher. (This difference will be worked out in negotiations this month.) …
… Linda Blumberg of the Urban Institute says much of the public’s resistance stems from still-sketchy details about how the new insurance exchanges that would likely be established for those without job-related coverage would operate. People who earn just over 100 percent above the federal poverty line would become eligible for Medicaid — and those up to 400 percent would qualify for federal subsidies.
I would like to see Medicaid expanded even more, and I would like to see more subsidies, and that may be something we should work on. But killing the mandate is un-progressive, IMO. And yes, with single payer this wouldn’t be an issue. And if I had the money I’d move to a penthouse on Park Avenue.
See also Nate Silver.
I’ve repeatedly pointed out that you can’t have a must-issue mandate without a must-pay mandate, because in the end only sick people would buy insurance without a must-pay mandate (why buy insurance if you’re not sick, if the insurance company is mandated to issue it to you once you become sick?) and this would result in lots of dead sick people because sick people consume 16% of U.S. GDP, but produce far less than 16% of U.S. GDP. Why is this concept so hard for many so-called “progressives” to understand? There is no free lunch, if you want health care, it has to be paid for. Is that so hard to understand? What am I not getting?
– Badtux the “1+1=2” Penguin
I really don’t get the anti-mandate progressives, unless the mandate is so poorly constructed that it penalizes the poor. As far as conservative opposition, in my view they’re just being selfish and backward as usual.
I look at mandates in a similar fashion to the requirement many states have that everyone who drives must carry auto insurance. It may be harder for some to make the connection that when an uninsured motorist causes an accident, the injured party cannot collect – is similar to: when someone with poor or non existent health insurance ends up at the emergency room we all pay for it, as shown in your earlier post about that very expensive staple.
I look at the steps toward a decent health care system, that covers everyone, in terms of overcoming a series of obstacles, in this order:
1) a mandate requiring everyone to buy in
2) a decent public option
3) universal single payer
At least it looks like we’re within striking distance of #1 this time around.
Badtux,
You can add. I can add. Maha can add. Some people here are addled.
How tough is this? Mandate and subsidize. Progressive tax rate anyone? And, somewhere down the road, pray for single-payer.
What makes any of you think that all these new premiums flowing into insurance company coffers will go into the insurance pool to pay claims? How much of it will flow right back out into the pockets of CEOs and speculators gambling on newly-created “health-insurance backed securities” (HIBS). Yes, I made that term up, in honor of the “mortgage-backed securities” (MBS) which imploded in 2007. Of course, we can insure the HIBS with credit-default swaps which, when they implode, will be supported by the too-big-to-fail TARP-3 program implemented by President Sarah Palin in year 2015.
In other words, what makes you think that insurance companies will behave any more responsibly than the banks? What makes you think that they will consider anything besides quarterly results and bonuses for CEOs?
Peace,
Robert
What makes any of you think that all these new premiums flowing into insurance company coffers will go into the insurance pool to pay claims?
I have other things to do beside look this stuff up for you, so if you really care and aren’t just bellyaching for the sake of bellyaching, you can find out exactly what’s in both the House and Senate bills here. Among other things, you might learn that both House and Senate bills provide for tightening some regulation screws on the insurance industry. You might learn, for example, that the House bill stipulates that private insurance companies must spend 85 percent of premiums on benefits; the Senate bill pins that at figure at 85 percent for large group plans and 80 percent for individual and small group plans.
As I said, I don’t have time to look it all up for you. Check out the section for “Changes to Private Insurance.”
Anyone who is paying attention at all understands Badtux. The problem is that as I understand the bill that came out of the Senate, we get the mandate but nothing to keep the insurance companies even close to honest. There is also the time lag, which I confess I have not pinned down in my own head, but you can bet your bottom nickel that the lag is not going to hurt the insurance companies. I have some trust —not a lot–in the Democrats not doing something which makes a bad situation worse., but my concerns are that it will delay the present system collapsing at high cost to relatively healthy and relatively prosperous citizens, will continue to line the insurance companies coffers with the equivelant of blood money, will lose the Democrats both the House and Senate with the end result being whatever meager gains have been achieved in terms of insuring more Americans will be lost and we will be further away from a rational system of paying for health care in this country. I hope I am wrong, but I truly believe that absent significant reform we were within 5 years of a single payer system and this may kick it down the road another 20 years. Single payer is the only way to obtain significant cost reductions and the downside is that then the GOP can cut the amount going to health care resulting in rationing and all the problems that entails.
Mandates are meaningless. I lived in a state with mandatory auto liability insurance and received a brain injury when a 19-year-old drove his well-to-do parents’ uninsured vehicle into me. They were covered for my dog’s care as he was property.
Lucky me, I had health insurance and spent the next decade fighting to get that contract honored.
If single payer is the efficient solution to the health debate why settle for mandated insurance? Why not approach the problem from a differrent angle? The insurance companies want to make a profit and the government wants to maintain fiscal soundness. And future generations would prefer not to get stuck with the bill. The questions are how to ease the insurance industry out of the health business, how to structure healthcare as a public good, and how to promote medical advances. Instead of dropping the medicare age 10 years why not place everyone born on or since 1/1/1990 on medicare for life to include pregnancy and prenatal care? This removes children from the ranks of the uninsured, provides them with the preventative medicine they deserve, and takes them out of the private insurance risk pool . With an aging and shrinking pool of customers, the insurance companies might well decide to focus on other lines of insurance products. The government can take up the issue of restructuring the medical industry with the AMA and other professional organizations to include visa policy, cost containment, and malpractice reform. Promoting medical advances remains a policy matter. Obviously, some adjustment to withholding must take place to pay for the new medicare members. But, as they are young, their risk pool does not bear the expense of the older members (and will benefit the program as time goes by). As for the rest of us, well, we are the ones kicking the national debt and the problem down the road onto the backs of our children and grandchildren, we earned what we have. Go ahead and mandate away, just leave the children out of that dirty scam. Don’t quit yet.
john in the boro — yes, that sounds grand, and in a better world maybe there’s a Congress that would enact something like that. However, we don’t live there.
I don’t know if you’ve noticed this or not, but Congress was barely able to pass the bills they passed. The bills the House and Senate passed are the only bills they are likely to pass, and if they scrap those the next versions — assuming they make another attempt at health care reform at all — will not be more progressive, but more conservative. Because that’s how it is. I wish it were otherwise, but it ain’t.
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I lived in a state with mandatory auto liability insurance and received a brain injury when a 19-year-old drove his well-to-do parents’ uninsured vehicle into me. They were covered for my dog’s care as he was property. Lucky me, I had health insurance and spent the next decade fighting to get that contract honored.
Stella, I’m so sorry to hear about your injury. I hope with time you were able to recover. Your story raises several questions for me. If the other party was uninsured, where did the “property” coverage come from for your dog’s injuries? Did your own auto insurance policy have Medical and Uninsured Motorist coverage? (Generally that’s how people pay for their own injuries when they have the misfortune of encountering an uninsured person running a red light, for example. I don’t think most states mandate those coverages, although in my opinion they should.) Or did I misread your comment, and your health insurer wouldn’t pay for the treatment for your injury? I don’t mean to pry; I’m just confused as to your argument against mandates, and I want to understand it.
A couple key things need to be pointed out, as well. Just in case everyone doesn’t realize, health insurance and property/casualty (auto liability) insurance are two completely different industries. They’re regulated differently, are subject to different market and loss forces, and are comprised of completely different companies. And of course, when we get sick, generally no one else caused our illness through some form of negligence, as they might when we’re injured in a car accident. I think maha does a good job in this post of summarizing the arguments for health-insurance mandates, which have to do with the risk pool (since liability usually is not an issue).
Terry comments on “this may kick it down the road another 20 years.” The USA will collapse b/c medical bills will be taking 33 + percent of GDP long before 20 years gets here.
Maha,
Yes, I did notice. I have no idea why I expected better.