Michael Maiello's picture

    We Don't Need No Stinking Mandates

    The Supreme Court will rule on Monday about whether or not the federal government can require people to buy health insurance from private insurance companies.  My own view is that, under the commerce clause, it can.  But, I see the point of conservatives here.  The mandate is probably the single biggest subsidy of a private, for profit, industry in history.

    If the government had seen fit to offer a taxpayer funded alternative, administered by people who could be voted out of office for charging too much and offering too little, a mandate to purchase insurance might make sense.  In that scenario, profiteers would have to compete for a huge pool of mass demand that, like the Pentagon or Wall Street banks, could always appeal to the Treasury or Federal Reserve to have its needs met.  Absent that, the mandate is a law that will require people to buy from Aetna or United Health, whether or not that want to.

    This is great, if you're an insurance company.  It's akin to the government mandating that people buy Whoppers once a month, filling the coffers of Burger King. It more than makes up for the costs of insuring every customer who wants insurance, whether or not they're already sick.

    The insurance company argument is that you must have this mandate if you want to require companies to cover people with existing health issues, or else the healthy will skip insurance and only sign up when they get sick and have medical needs so expensive that they dwarf health care costs.

    But, Obama the candidate in 2008 was right.  If health insurance is affordable and, from the point of view of consumers, worthwhile, people will buy it.  Just like any other product.  The insurance industry would have you believe that people would wait until the last minute and only by insurance on the way to the hospital, after being hit by a bus, or after a cancer diagnosis.  They call this the "free rider problem."  This is crazy talk.

    We know this because, in the U.S., emergency rooms cannot deny treatment to people based on ability to pay.  If there were a free rider problem, everybody would take advantage of this.  They would only see emergency rooms and would say, after treatment, "bill me."  Yet, very few people do this.  In fact, the uninsured do this less often.  The uninsured are more likely than the insured to just tough it out and go without medical treatments.

    Candidate Obama was correct.  If insurance is a good deal, people will take it.  They prefer to take it.  They do not need a law to compel them.  The idea that there are free riders out there, mooching off of the insured, is a fiction.  People without insurance, which is to say people for whom insurance is a bad deal, by in large use health services less frequently and they pay as they go.  And, by in large, they do pay the bills they incur.  As we all know, insured people, who are part of a large pool of consumers, pay lower bills than the uninsured,

    Three years ago, I wrote about this in my column for Forbes and even interviewed a health care lobbyist who supported the individual mandate.  This is what I found:

    Last week I e-mailed with Janet Trautwein, head of the National Association of Underwriters and a big advocate for what she calls a "strong individual mandate" to buy health insurance that would have harsh penalties for scofflaws. She and her organization, who support the "strong individual mandate," are critical of mandates that require employers to provide coverage, and she has also argued for less generous government subsidies that will help people pay for the insurance that she wants the government to require them to buy.

    I asked Trautwein to supply some evidence of the free-rider problem in health insurance. At first she said that the rationale was largely "intuitive," but when pressed she sent me the Harvard Pilgrim blog post. Then she made up a story about how somebody could skimp on health insurance, get into a skiing accident and stick it to the system for $100,000. Then she said that under previous regulations that have pretty much nothing to do with the environment that will follow health care reform, some companies went bankrupt offering "no questions asked" health care.

    As best I can tell, the entire free rider problem is merely a myth perpetuated by the insurance industry, which has long coveted a law turning every American into a customer.  The story makes sense, in a way.  Why not wait to buy coverage until your ski accident?  But, candidate Obama is right.  People who can afford coverage and who don't count on their ability, with two broken legs in the back of an ambulance, to shop and negotiate for it, would rather just buy a fair and affordable plan in advance. To the extent that people don't buy it, it is a failure of the industry and no different than the fact that I will not buy a Big Mac tomorrow, because I believe that a Big Mac is, at best, poor bang for my buck as nutrition.

    I could live with the mandate if there were a public option.  If the government entered the market, with all of its force and power, to deliver cheaper and better care for all, that would make sense to me.  But to leave the entire industry in the hands of Aetna, United Health and Cigna, while mandating that people do business with these rapacious corporations is not just indefensible, it's illiberal.

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    We need the mandate!


    The finest care in the country, measured by outcomes, is delivered neither via profit seeking providers, nor paid via profit seeking insurers.

    Medicare for all, TAKE OFF THE CAPS


    It's 'unhealthy' that those who are in the 'minority', who not only have premium health insurance coverage, but also the financial means to pay for what is not covered, continues to decide how the majority of us who do not share in their largesse, will be able to secure even our most minimal healthcare needs.  

     


    the best care in the country at Paul Ryan's paltry (voucher) price . And that's treating battlefield trauma too boot!

    Good grief! It's "to boot" not "too", you idiot!

    Destor, it may be worth questioning the common assumption that free riders would doom a mandate-less health care plan, but your argument is way too breezy.

    First, the ER certainly isn't free. Hospitals bill everyone they treat and pursue those who owe them like any creditor. The only people for whom the ER is "free" are those who lack the money to pay. In other words, it's only free if you're bankrupt.

    Second, the ER is not health insurance. It does not provide medication, long-term treatment, procedures for non-critical health problems, etc. And the care for the uninsured is abysmal.

    Third, despite the ER's limitations, we do actually have a free-rider problem under the current system. There are people who can afford health insurance (if not easily) but decide to take their chances. I was one of them at one point. If I'd gotten sick and had to go to the ER, I could easily have ended up as "free"-rider, as I would not have been able to pay a large medical bill.

    I've done no studies, but speaking for myself, if I did not have the threat of being denied coverage hanging over me, I would have gone on a lot longer without insurance. Even now, as someone who is still relatively young and healthy, it would probably make economic sense to cover the small stuff myself and if, I were to become seriously ill, obtain health insurance when I really needed it. I have trouble believing that I would be the only person to make such a calculation, especially people much younger than me.


    Hence, VA for all. The costs don't require forced sharing because the facility is there either way. If you're foolish enough to forgo the prevention available at reasonable cost, we'll sell your femur to the bone bank when diabetes catches up with you..

    You can, of course roll the dice like I did and be improbably lucky. I, too, "self-insured" for decades. Six months after a paperwork era in D.C. brought me into Medicare, (notwithstanding I am 19...), I got such superb care for my broken neck, it's like it never happened. alas, my good friend, age 56, three days later passed through the same ER in Hartford (St. Francis) with a blown brain aneurysm. His uninsured ass was shipped off to Hartford Hospital where he recovered from the stroke but contracted pneumonia, leaving him comatose for a month, permanently trached , and still, I hear, a year+ on, in Windsor Rehabilitation nursing home with fewer than all his faculties. It's good to be lucky.

    Genghis,

    We're very often told, without much argument, that emergency room bills typically go unpaid.  But that's not true. The vast majority of the uninsured pay for every service they receive, in full and on time, the same way that the vast majority of people pay every bill they incur, in full and on time.  These people are the opposite of free riders.  They pay more, per service, than the insured do.  If anything, the fleecing of the uninsured is a problem that the mandate addresses.

    As for the decision to free ride, well... I have a kid.  I'd never risk it.  The last thing I want to do is find myself in the position of begging UHC for coverage when Destor Jr. is in trouble and I will be, by definition, irrational.


    I'm not sure that anyone has told me that ER "typically" go unpaid, just that many go unpaid. I base this on anecdotal evidence from friends who work in ERs. If you have more statistical evidence that unpaid ER bills are uncommon, please provide it. (And again, ERs do not provide a real case of the free-rider problem because they're not free.)

    Obviously, a middle-class father is an unlikely free rider. The classic free rider has few resources and little to lose by having no insurance--a young, healthy single person. That's not recklessness. If insurance companies cannot reject applicants, it doesn't even make financial sense for healthy people without dependents to get health insurance until they get sick.


    My point here is that nobody really "free rides."  You basically have two classes of people: those who pay for insurance and those who pay for services and, within both of those classes there are people who, as with anything, don't pay their bills.  I can't find it now, but I've done a lot of research on this and seem to remember a pro-mandate paper that admitted that the default rate on medical bills among the uninsured is something like 3%, which makes a ton of sense as the default rate on just about any bill, be it a mortgage or parking ticket, is around that level.


    There are also sliding pay scale plans that many medical facilities have in place based upon income.  While these are usually limited to office visits, prescriptions and emergency care, they do provide some relief for lower income applicants.

    However, the middle class members who don't have insurance, or insurance that pays little, suffer huge financial hardships when there are severe illnesses (cancer, etc.) and/or injuries. Often losing most assets, even homes.  

    I am very interested in any stats available that quantify the losses to the state and federal payroll tax revenue and costs incurred due to the needs of those who utilize available social programs due to lack of affordable healthcare and can no longer work.


    On the one hand I think you are correct in that those folks who use the ER pay for their services. The main problem for the uninsured is they lack regular access to health services so often times when they come to the ER the services they require would not have been so dire had they had regular access to a primary care physician.  So the costs required can be high, and if they require follow up care or long term comprehensive care as a result they are unable to afford it and not only does their quality of life deteriorate but their lives are inevitably shortened.

    Adequate access to primary care is the most important thing we can deliver to the uninsured.


    Genghis, with all due respect, you make the argument of the healthy.  Chronic, debilitating illness can be sudden, unexpected and severely impact your ability to keep making the kind of money you earned as a healthy person.  That is what happened to me.  And chronic diseases are striking Americans at a greater frequency than ever before.  Some blame it on the STDs of the 80's for triggering more autoimmune diseases, but whatever the reason, Americans in general are not as healthy as they once were.  We no longer live in a world where one can trust that their good health, with proper attention, will last their lifetime.  

    I am very lucky that after being diagnosed in 1985,  I applied for health insurance and I told the truth and mentioned my pre-existing condition.  Luckily also, the people at the insurance company at that time, were not that familiar with Ankylosing Spondylitis and they approved my coverage.  If they had disqualified me then, I don't know that I'd still be here to write this.  I certainly wouldn't have had my hip and knee replacements or be able to afford being on Remicade.

    Of course, my premiums in the last couple of years have gone up dramatically; over 300% at least. (It's too depressing to actually calculate the exact figure.) This has been the price one pays for a completely unexpected illness, one I could not have anticipated or done anything to prevent.  With health insurance I am impoverished due to higher premiums and lower wage-earning power. Without health insurance, I'd be even worse off. 

     


     


    Once stabilized, they dump   ship  you out to the County hospitals. 

    Or where ever they take the poor folks. 


    Actually, usually they have to go through the process of qualifying for Medicaid before they will be accepted somewhere like that for more treatment.  She's right, if you don't luck into a good social worker or have savvy family/friends to get that started for you, you're just going to proceed on the dying. People already covered by Medicaid are the ones that are transferred to the proverbial at "county" by those hospitals that don't deem Medicaid sufficient payment. Not the uninsured with unpaid medical bills; they are not welcome there either.

    Say you are uninsured, find out from the emergency treatment that you've got cancer that caused the emergency--dearly departed TPM friend "Pseudocyants" went through that, his family helped a great deal, he couldn't do all that while basically being paralyzed by a back operation; when you're sick it's not easy to do that stuff. Without knowing that he was in the process of getting Medicaid (which required getting rid of any nonesssential assets,) they would've sent him home to be an invalid with cancer, rather than take him at the equivalent of "the county."  Meantime the drug he needed was a derivative of thalidomide and wasn't covered by Medicaid, he ended up getting it on a charity program from the drug company that made it.

    Make no mistake, nobody has to treat you without insurance if you've got something like cancer, they just have to take you if your writhing and screaming in symptoms from it and give you some pain meds, send you home again to continue the dying or seek charity care. Same thing for, say, complications from severe untreated diabetes, they just have to amputate your leg for the gangrene and send you home without diabetes care, i.e., they give you a warning that you should be seeing a doctor or you're going to lose another leg, that's it. They don't have to give you therapy after an amputation or anything like that, either, and better find a place that donates wheelchairs.

    Another example,  I knew of a uninsured healthy guy who like in his 30's got a serious heart infection which caused damage to the valves. They took him in emergency, stopped the infection, sent him home with a $60K bill due and damaged heart valves and then no one else would see him to treat the problem because he hadn't paid that emergency bill, couldn't work, used all his credit. Friends and family lent, mortgaged, held fundraisers, etc.

    There was always the crucial delay in treatment before people could get on Medicaid, that's where the dying part comes in. In some states there are ways to get emergency Medicaid coverage but you have to be savvy or have a savvy social worker, willing to put in a lot of work, too (Not that people with insurance don't have to put in a lot of work to deal with their claims, too; both private varieties and government varieties are notorious on this! As with other kinds of insurance claims!)

     


    They called Kevorkian a monster

    http://en.wikipedia.org/wiki/Jack_Kevorkian


    It was sad to hear about our  TPM friend "Pseudocyants"

    How old was he? 


    Obit with his age is here

    http://obits.reviewjournal.com/obituaries/lvrj/obituary.aspx?pid=144515095

    Guestbook here

    http://www.legacy.com/guestbook/lvrj/guestbook.aspx?n=kenneth-turner&pid...

    Took me a while to find that because of the damn TPMCafe site being taken down (his sister's link in the guestbook to a memorial thread at TPMCafe is now no good frown)

     


    I stopped reading Ezra Klein not long after he came out in support of Ezekiel Emmanuel and Victor Fuchs proposed national healthcare plan, basically Obamacare.  Emmanuel and Fuchs presented their plan in the Washington Monthly and promoted it as guest bloggers on Political Animal.   It was instantly and massively hated across the left blogosphere which did not phase its authors at all.

    You may remember that Ezra, despite his youth and inexperience, was the left's go to guy for healthcare blogging which in all fairness he had earned.  He is whip smart, articulate and had immersed himself in a subject not generally appealing.  

    I still remember how disappointed I felt when he revealed his support of what we now know as Obamacare.  He knew single-payer was a better option but did not think it was politically doable.  He rationalized Obamacare as the camel's nose under the tent way to single-payer.  I thought it foolish but knew the left blogosphere would follow where he pointed.  And they did.  There would be no single-payer in my lifetime so I stopped reading him.  I wonder how he feels now.

    Now my main point.  If camel's noses are to be used as a way to a universal single-payer, follow Medicare's lead and find something to cover that the insurance companies do not want anyway.  Start advocating for universal Denticare.  Just a thought.

    Oh, and stop listening to false friends:

    Ezekiel Emmanuel Doesn't Like Social Security and Medicare 


    A mandate is one (partial) way of socializing health care delivery.  That's good.  If we want a society in which everyone gets the same level of health care, then we have to ask everyone to chip in to pay for it - even those rugged individualists, or the illness-free young, or the paranoid doctor-haters who would prefer to be on their own.

    Now we can either mandate that they actually purchase a share of health care, or we can mandate that they pay a big health care tax, and then leave the decision to avail themselves of a health care policy as a matter of personal "choice".  The first seems obviously fairer.  Either way, we need them to chip in.

    We can't afford the, "If health care is worthwhile, people will buy it on their own" approach.  We could say the same thing about education for one's children, or about defense.

    The per capita cost of health care rises tremendously if it is paid for solely by the people with the need for health care, just like the per capita cost of education services rises if it is paid for solely by people with children.   Some people might not like the mandate, just like people don't like taxes.   But tough.   When the young folks are old, we will make the next young generation pay for their health care.  For now they should suck it up, recognize that they are part of an organized society, not free agents, and stop whining about their precious individual rights.

    Single payer national health might be better.  But we didn't get that.   All we got is a private system with government regs that help makes sure the costs and benefits of health care are shared somewhat more equally than before.


    The critical word being "private ". the fetish for some illusion of competition as if anyone is in a position to choose let alone bargain with a doctor OR carrier is preposterous. The insurance industry vig alone would pretty much underwrite adding all uninsureds to the pool. Medicare will be "on the risk" eventually so preventive intervention is cost effecttive to the long term govt. cost no matter what the initial bump. How dumb can we be?

    Saw this on UP with Chris Hayes this morning.  The human side of Obamacare and the mandate


    Things were different in the good old days ...




    Note: "Polio included."


    Hah the good old days. "Major Medical" insurance was what most people had, and that basically meant hospital insurance only. You paid for anything outside of the hospital and you paid for your doctors' fees even when in the hospital. But you didn't have to pay for those aspirin provided by the hospital (for which Blue Cross/Blue Shield sometimes was billed $5 each, if I recall the good old days outrage correctly.)

    Doctors took time payments because nobody had credit cards and there was no insurance covering much of what they did.  Some big labor unions offered free or low cost medical care for members and families in their own clinics, but there you were stuck with their lousy docs and things like one choice of eyeglasses frame (Army surplus?)

    Lots of retired people only chose the free Medicare Part A hospitalization in 1965 when Medicare came into being, they didn't take optional Medicare Part B for doctors because of the premiums, they figured if something happened, they needed surgery or whatever they would pay the doctors themselves like most people had to.

    Oh and remember this--people died young from heart attacks and  stroke and breast cancer and stuff like that back in the good old days--there wasn't a lot of high tech medicine--it was take two aspirin for those bad knees of yours and call me in the morning!

    I remember it like this: my parents talking about finally paying off the doctors' bills for each birth of my brothers, and for the pediatrician when the they did stuff like break bones, but they never ever seemed to be out of hoc with the dentist.


    The Supremes' lips are sealed on this until Thursday: Reuters


    Destor, the irony of all this hand wringing over the mandate is...

    The mandate appears to be toothless...

    The penalty can be as low as $100...

    The penalty can be waived and would be in the case of financial hardship...

    And even if it isn't waived, nothing happens if you don't pay it.

    Apparently, the much-maligned Democrats whittled down the penalty in committee until it was a stub of its former self.

    So the only people it is like to catch are those who are cocky financially and health-wise and are willing to pay the fine until they need the insurance.

    There needs to be a waiting period to catch them folks.


    A good discussion.

     We'll know tomorrow what sort of Health  Plan Rodgers intends us to have. Or rather who he thinks should make that decision.

     Dworkin in the NY Review thinks it comes down to whether the Supremes think  a Government is supposed to govern.And they should

    Jeffrey Rosen on Diane ditto but with his fingers crossed.

    Personally I'm for the Mandate until I decide I'm against it.It was needed to get a bill that would pass a Senate with only 59 healthy Democrats. Sometime-after Citizens United is repealed there'll once again be a liberal Administration and Congress.. That may be 2030 but "God sees the truth but waits". 


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