Megan McArdle writes:
Tyler wonders what will be done
with people who are required to by health insurance, but don’t. The
answer, I think, is "they’ll get treated". The object is not to play
chicken with people; we can’t make a credible committment not to treat
people without insurance (and thank god for that.) The object, as I see
it, is to force the people who care about things like legality to get
insurance rather than rolling the dice. The people who don’t care about
such things will continue costing us some fraction of the small amount
that caring for the uninsured currently costs us now. It may only be a
slight improvement, but it’s still an improvement.
"Improvement over what?" is my query. I prefer taking the needy (some would say more than the needy, not I) and having the government directly provide health insurance for them. I imagine a better and no-real-role-for-the-states version of Medicaid, at the expense of Medicare (lots of old people are wealthy) if it fiscally must be. If it’s worth forcing X to buy health insurance and then subsidizing X, it is worth giving X health insurance directly.
Avoiding the mandate keeps the private insurance market relatively "clean," as it were. Mandating private insurance means that the government has to regulate the content of that coverage and that private insurance will likely become more cumbersome and more contested and more expensive for everyone. It means we will never have true insurance deregulation; private plans should be free to compete, innovate, offer catastrophic-only plans, sniffles-only plans, and so on.
The benefits of the health insurance mandate are otherwise small. Many people care about "being legal" (the parents of uninsured 20 somethings?) but those people are probably the least likely to need the insurance. And I am leery of having a law that we know in advance we are not going to enforce. (It’s not as if you post a 25 mph speed limit knowing you will only pull over the young people who look like criminals; in this case we’re simply deciding on no enforcement or using some dubious bureaucratic tactic of differentiation across citizens.)
And aren’t mandates more generally a dangerous and over-used practice?
So I say no, let’s not do it. It might be better than doing nothing, but doing nothing is not the only alternative before us. Doing nothing is not even the likely alternative at this point. The mandates limit chances for better long-run reforms, though Matt and Brad will tell you this is single-payer, I will look toward insurance market deregulation. Only one of us has to be right.
Addendum: Here is Ezra Klein on same.
My wife, not PhD in anything, says we’ll never know if Radiohead is worth a damn, because that would entail removing Faith No More’s
Angel Dust from the CD play.
She also says right on to all the above.
Megan McArdle remains dear to our hearts for taking Gladwell behind the wood shed.
Very nice point on passing laws that we don’t want to enforce. Here in Bangalore, India the govt has made carrying a switched on mobile(even if you aren’t using it) a crime when the benefits of this legislation are extremely dubious. It’s obvious this is more grandstanding. The most dangeous thing is that politicians dont’ mind passing a law like this, most citizens don’t mind passing a law like this(knowing it won’t be enforced) and thus are penal codes pile up with laws that make no sense at all and are basically electoral signalling devices.
From early experience with mandated insurance, you overlook two important aspects:
1) Free-rider problems, from
a) The need to pay to those who have no insurance and need healthcare. Unlike home, auto, etc., we do not have a societal acceptance of abandoning them untreated. With home, auto, etc. if you are uninsured you risk bankruptcy.
b) The absence of the low risk participants from the insurance pool. The lowest insurance participation was from the under 30. By chosing to be uninsured, these low risk healthy people were placing their insurance cost onto the public. One of the reasons that mandating insurance is more palatable is that they do deserve and get lower insurance rates. The net impact on rates for the older and less healthy is thus small, but at least the older and less healthy are not subsidizing healthcare for the young and healthy.
2) Availability of insurance for individuals, consultants, and small businesses. This was a major problem. It is a major barrier to new businesses, consultants, and part time workers to have no ready access to insurance. Part of the mandate is a mandate to provide pooled insurance coverage to these customers. There is still a risk variable in the premium, but there is now a pooled risk option available. Experience had shown that over 16% of uninsured emergency care users had incomes over $100K, and about 60% were considered to have no difficulty in paying for insurance. One major excuse given was the difficulty obtaining insurance when you were not employed by a large firm. I know a number of consultants and small business owners who viewed this as the primary benefit from the new law.
The concern about establishing minimum coverages is quite real. This has been a difficult and contentious issue. I think that the minimums are too high, but the process followed and results have not been the lopsided welfare thinking that typified previous insurance regulation efforts in MA. It remains to be seen how this works out.
Both here and politically people are trying to do too much with mandating health insurance. Healthcare has hundreds of serious problems. It will need hundreds of fixes. Trying to put too much onto any one fix causes more problems than it solves. My view of the purpose for the mandate in MA is the solution to one medium size problem:
a) too much money was going to those who were not poor. This percentage is much larger than the generally published 3% figure. 3% is percentage of overall costs. What mattered here is percentage of uninsured payments. It was more like 20% going to those who should not have been covered.
b) It was encouraging the wrong kind of behaviors
– Young and healthy patients were being rewarded for going uninsured. (They got free coverage).
– Marginal and poor patients were being rewarded for failure to take preventative actions.
c) It handled the needs of poor part-time workers especially badly, making it hard to transition from poor and unemployed to poor and working.
It does not attempt to solve all the other many problems in healthcare. It doesn’t need to. Resolving cost and behavior inefficiencies in the provision of care to the poor is a sufficient goal for one change.
Is it worth noting that medical service is denied every day to needy (in a medical sense) individuals under the system we have now? I understand that the system we have now disperses culpability, and that a nominally universal system under government mandate would put elected officials and bureaucrats in the position of facing bad headlines if service were denied to the needy-but-forgetful. Beyond that, though, if denial of service to some, at least initially, made the system work better, is that an ethical problem? As a fallback, we could make provision for signing people up at emergency rooms. Make provision to care for the non-insured if not mentally competent.
There are ways to enforce such a law other than denying treatment. E.g., income tax compliance is very high, even though you still get paid if you file late.
The statute books are already full of mandatory coverages. Yes, that’s a bad thing, but if everybody has to have them, it will increase the pressure to eliminate the marginal ones.
The reason not to “give” everyone health care is that, like car, housing, and life insurance, you want to promote innovation and competition. Decentralizing the purchasing decision gives you that.
TGGP:
You continue making your remarks personal thus indicating a lack of actual substantive points that you have to make.
I’m breaking with my usual policy of not playing that game this time to point out that I covered your type of mindset in my final sentence:
“…abetted by ideologues so caught up in the theoretical they forget to look out the window.”
Ideologues, such as yourself, are so caught up in their belief systems that they can’t “bother even engaging in discussion”.
What part of “the rest of the industrialized world has functioning national health plans” don’t you understand? We, who would really like to see things get better in the real world, don’t see the point in engaging in ideological arguments with those whose ideas have no hope of ever being adopted in any real social system. Especially with those who have to resort to ad hominem attacks.
Here’s the issue: we can continue to expand an inefficient piecemeal private/public insurance system or we can work towards replacing it with a unified national health system. The more practical will work to expand the fragmented system, the more idealistic will work for a national system.
No one will work towards making libertarian schemes a reality.
robertdfeinman: “The only purpose any insurance provides is to spread the risk over a large group.”
The variety of private health insurance programs allows us individually to decide how much risk we will assume ourselves and how much we will pay insurance companies to assume. Would you take away from individuals that freedom to choose?
The biggest problem I see with health insurance today is that government restricts the products that can be offerred. Government has restricted our freedom to choose the right plan for our individual needs.
“It is worth noting that many older Americans are in a financial position in which Medicare is simply gravy”
Problem is, those older folks paid into the system for 40 years. Wealth was taken by the government for Medicare:
- from the Greatest Generation when they were middle aged and older citizens;
- from the Boomers for all of their adult lives;
- from the Boomers’ children for all of their adult lives so far.
Now the grandchildren of Boomers – the great-grandchildren of the Greatest Generation – are saying “We shouldn’t have to pay for anyone except the poor!”
It doesn’t work that way. You have no right to sharply reduce the standard of living of the elderly because you do not want to share the same burden your previous three generations have shared.
If you want to argue that the younger generation should not have to pay any more than their parents paid, I can understand that. But the resulting reduction in medicare benefits needs to be applied across the board. We should not penalize those seniors who were thrifty and saved.
Many of today’s Boomers played around, spent all their incomes, and put off saving until they were old. Most of my siblings fall into that category. It will royally piss me off if they get a free ride as seniors.
By the way, you are probably grossly underestimating the cost of health insurance for the elderly. In fact, many of us are considered to be uninsurable because of diseases such as diabetes. Stripping away Medicare because we have a couple of million dollars in assets just may be a death sentence for some.
We can not force people to take health policy.I think Health insurance plans is a necessary part of life like other thing.
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