Mandatory health insurance

by on October 6, 2007 at 8:02 am in Medicine | Permalink

Glen Whitman reports:

1. According to an Urban Institute study, uncompensated care for the uninsured accounts for only three percent of U.S. health care costs.

2. 47 states require drivers to buy automobile insurance, yet the median percentage of uninsured drivers in these states is 12%.

3. States should eliminate required benefits from insurance policies and allow the poor to buy policies for (relatively) cheap catastrophic care.

Here is the full piece, from Business Week; this is a topic deserving of more attention.  I’m still wondering what — de facto — will be done against those poor people who are required to buy health insurance but don’t do so.

Here is Glen’s post on Joel Waldfogel, and here is Glen attacking restroom hand dryers.

Grant Gould October 6, 2007 at 8:52 am

I would expect that what we’ve seen in Massachusetts — first everyone lobbies successfully to get everything included in the minimum, then because of the resulting costs the mandate is dropped for many low-income folks — will be replicated anywhere else that tries it. Certainly I have seen no indication that anyone has a plan to avoid it, and the Romney and Clinton plans both look to be carbon-copies of the MA approach.

KipEsquire October 6, 2007 at 11:40 am

“47 states require drivers to buy automobile insurance, yet the median percentage of uninsured drivers in these states is 12%.”

Liability insurance, to protect others, not the driver or the owner of the vehicle herself!

Can you name one state that requires collision insurance, which is the correct analogy to health insurance (i.e., insulating oneself, not others, from unexpected costs)?

Eric H October 6, 2007 at 12:03 pm

Interestingly if we had universal health care then auto policies would become cheaper. This is because they include health provisions for injuries caused in accidents.

Assuming the state wouldn’t try to recover costs from drivers (and their auto insurers). If you cause an accident, shouldn’t you be held as liable for public expenditures as you would if you caused a forest fire?

I remember reading a proposal from John Semmens that states should stop producing license plates; instead, people be required to get their plates from their insurer. You could tell right away who was insured, who was not, and who was insured by those companies known for covering high risk cases. The companies would be responsible for anyone owning their plate, so they would be incentivized to recover plates from non-payers. I’m not sure how well it would work. I do know of one person who moved from VA to NM and had his rates go *up* because of the uninsured motorist provision, so I don’t know that it would be worse than the existing system.

robertdfeinman October 6, 2007 at 1:15 pm

Mentioning enforcement by insurance companies reinforces my point that states have chosen to allow uninsured motorists to drive as a cost-savings measure.

Since the insurance companies know immediately when a policy is no longer in force it would be simple for them to notify the DMV (perhaps they already do) and thus for the cops to take appropriate action.

There seems to be a class of laws that are on the books but not strictly enforced. People’s sense of fairness or morality demands such laws, but there would be too much of an outcry if the enforcement was comprehensive. The most obvious example is speeding. (In my neighborhood this would also include holding a cell phone while driving.)

These are perfect examples of “do what I say not what I do”. This is apparently a common human failing.

Eric H October 6, 2007 at 1:47 pm

Since the insurance companies know immediately when a policy is no longer in force it would be simple for them to notify the DMV (perhaps they already do) and thus for the cops to take appropriate action.

Which is what? Most people cancel their policy to change to another provider. Notifying the DMV and expecting immediate action would result in lots of unnecessary expense. Describing plausible policies (“There outta be a law …!”) is the easy part; figuring out the realistic application and unintended consequences is the hard part.

robertdfeinman October 6, 2007 at 3:21 pm

Eric:
Here in NY you get in trouble if your policy lapses, so when switching to another insurance company you better make sure there is no gap.

Lots of the non-insured pay on the installment plan (you need to show proof of insurance to get a registration) and then let it lapse by not paying future installments. If you have any evidence for “lots of unnecessary expense” it would be nice to hear it.

On a cop show I saw recently (set in San Francisco, I think) the cops took the plates off a cab that had been stopped for some infraction. I don’t know if this is realistic or dramatic license, but it is one example of how better enforcement could be carried out without to much additional effort.

robertdfeinman October 6, 2007 at 5:09 pm

Eric:
It’s what I said before, who bears the cost? As things now stand it is law abiding citizens in the form of higher insurance premiums. Those without insurance are getting a free ride. The state has decided to allow this shift in costs.

The issue of good vs bad drivers is also irrelevant. Even a good driver can get into an accident. Most drivers think they are above average and most people also misjudge the degree of risk in many circumstances.

Suppose we had a referendum and asked voters whether they would prefer cops to go after those without insurance or those involved in marijuana (buying, selling or using). I would guess that the amount of police work involved might be similar in both cases (although not in the same neighborhoods necessarily). I have no idea what the results would be but, at least, the voters could explicitly decide which laws they wish to be ignored.

It is the backhanded way enforcement decisions are made that I’m objecting to.

Eric H October 6, 2007 at 5:42 pm

But I’m asking the same question: who bears the costs? Additional enforcement of these laws will fall on non-drivers and those whose money is better spent on food or housing. Or medicine!

So long as you want to talk about *social* costs, driver quality is not irrelevant. A very small percentage of drivers (elderly and the young) are responsible for most of the accidents, and the fact that risk exists and people may not be good judges of their own does not mean everyone’s risks are equal or that differences are irrelevant. Just so with health insurance: adverse selection is a primary driver of the debate.

anon October 6, 2007 at 7:07 pm

Why all this concern about the uninsured? Whitman says that 3% of medical care is uncompensated. I can’t Google up the exact figures at the moment, but I know Medicaid is bigger than 3%. Why not just throw the 3% into the Medicaid column? Medicaid recipients aren’t compensating anybody for their care either.

And it’s not as if the uninsured get off scot free. They are liable for care that they incur and they can lose everything not protected by bankruptcy laws if they fail to pay. To suffer a disease that’s severe enough to throw you into bankruptcy, and to then suffer the bankruptcy in addition to the disease, all sounds pretty unpleasant. And if you go bankrupt you might well qualify for Medicaid anyway.

I say leave things alone and let adults make adult decisions about their lives.

Gordon October 7, 2007 at 1:26 pm

I’m 61, retired (yes, early), living fairly comfortably, and with no medical insurance. I can’t buy individual medical insurance in New York because the mandated minimum coverages are so generous. I can’t buy catastrophic coverage because no one offers it in New York State. When I need a blood test, it costs me $200. When I got the same blood test a couple of years ago when I had insurance, it cost $10. The reason for the difference is that now I can’t access the preferred provider organizations that the insurance compnies use to provide services. So, while I am probably healthy enough to pay for my own medical needs, I am being ripped off because the insurance companies force medical providers to charge uninsured persons exorbitant fees, thus forcing me, who cannot buy my own coverage, to subsidize insurance company-mandated price controls on medical providers.
I think socialized medicine might be more rational.

Gordon October 7, 2007 at 5:44 pm

Don’t think so. Isn’t there a problem with someone subsidizing someone else other than via government taxation?

Oh, sorry, this is a Republican site. Subsidizing insurance companies is ALWAYS good.

JH October 8, 2007 at 11:58 pm

I agree with the statement that health insurance should be mandatory and that cheap options should be provided for the less fortunate people. If health insurance was mandatory it would eliminate the situation people get in by not having the insurance. Some people that need emergency health care are unable to pay the bill, if they had health insurance they would not be in that situation, i think in the long run people would be satisfied with the mandatory insurance it would save them the headache of worrying about the bill.

joe dupont March 16, 2008 at 10:21 am

Mandatory Health Insurance is one of the last chains to total slavery. Who do you think benefits from this. Our governement has been bought and paid for by lobbyists.
The Clintons , and I now that you all don’t remember this, tried to come up with a tax for all of those who had their mortgages paid off. they felt that if they were not paying off a mortgage they had more to give.
when they were caught they laughed it off and said it was only a trial balloon. What evil lurks…..
you think off all of those old timers in their cabins living off the land and now they have to produce health insurance premiums.. or lose their cabin.
this is sick.. very sick.. and getting sicker.
we are all going to live and die.
if life was so precious we would put to death those who stole it from another. if life was so precious we would not abort so many babies. it is a matter of getting more money from us before we die.. and forcing us to be slaves to the man. This was America before the Supreme Court stated to study other laws to make decisions here!!!YOU USE TO be able to decide how you wanted to live and how you wanted to die. Now that is going to be gone. You won’t die until they have extracted every last dime from you..until they use chemicals to kill you in your blood, water and food.

Uncleduke316 October 8, 2008 at 6:43 am

Does anyone see how assinine it is for liability to cover everyone BUT the driver paying?? IF a paying driver hits an uninsured one guess who gets it up the ass? And if said uninsured driver is illegal? NOT A PROBLEM! Who do you think mandatory insurance is all about? So the liberals can go to sleep at night knowing they have illegal citizens and poor non white people covered.We are forced to pay and the insurance lobbies suck in the cash! What a SCAM.Why is the answer never LOWERING THE PREMIUMS so people can AFFORD IT????America: consolidate your credit cards and GET RID OF THEM. This is how you hit them back!

shaun December 14, 2010 at 1:58 am

Interesting and insurance is something that each and every individual should opt for you never know when will you need it. http://topinsurance.org/

Violeta February 7, 2011 at 1:56 pm

It’s like we never have enough taxes on our heads, there’s always room for some new ones. Poor people!

Bamboo February 7, 2011 at 2:02 pm

How fair is it, when somebody can’t afford health insurance to be left untreated, even if she suffers from life-threatening ailments? If people afforded those premiums, they surely would pay, but when you don’t have money to buy food, who cares about insurance?

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