3.22.2017

on mandates, and mandates

Let me begin with a rant.

Look, I know headline writers and Twitterers have to shorten stuff up.

But let's keep in mind that reforming "health insurance" is not the same thing as reforming "health care." Because insurance for care is not the care itself.

Is the cost of care relevant to the care that people get? Of course! Do insurance companies effectively practice medicine when they deny coverage for expensive treatment? You betcha!

But relying on changes to only one component of a very complex system to produce systemic *and positive* change strikes me as ... overoptimistic.

Words are all we have to articulate our goals. Let's be clear about what our goals are.

Now that I have that out of my system, let's talk for a moment about mandates.

No, not that mandate. I want to talk about the mandate that, if you own a motor vehicle in the United States, you, generally speaking, have to have a verifiable way of making good on the damage that your car does to other people and property. The way vehicle owners do this varies from state to state. In most states, it's through automobile insurance. In Virginia, if you "go bare," you have to pay the state an annual $500 fee. Mississippi lets you post a bond (which is just another form of insurance if you squint at it) rather than purchasing conventional auto insurance. New Hampshire only requires you to carry auto insurance if the state concludes you're at high risk of damaging somebody.

The general principle is this: you are required to carry auto insurance (or its equivalent) to protect other people from your screw ups. And it's prudent, frankly to have auto insurance to protect yourself from your own. As far as I can tell, the idea that you have to carry auto insurance to protect other people, that is, the general public, is not particularly controversial.

What is a requirement to carry insurance? It is a mandate.

Fast forward to the much more controversial mandate to purchase health insurance, or pay a penalty to the feds--much like the Virginia uninsured vehicle requirement above.

The most commonly-heard argument for the mandate has to do the economic necessity of getting young healthy people buying insurance they probably won't use to pay for the cost of old sick people using the heck out of their insurance. That isn't what I want to discuss in this post.

There is an entirely different risk-sharing/policy setting issue. Maybe it is discussed a lot and I've been missing those discussions.

Let's consider a young person. Our hypothetical young person ("HYP") is healthy, living independently, but of modest means. HYP therefore does not purchase health insurance, because it seems to be an unnecessary expense in a tight budget. HYP is gambling. Oh, sweet bird of youth!

On a dark and stormy night, HYP, crossing the street in a clearly marked crosswalk, is hit by a speeding car which vanishes into the night (because this is a hit-and-run, we can't file a claim against the motorist's theoretically mandated automobile policy--if he or she even has one). HYP is rushed to the emergency room and proves upon examination to have a shattered pelvis, a ruptured spleen, a lacerated liver, and a possible concussion, and is also noted to have a blood glucose level of 330, suggesting hitherto-undetected type 2 diabetes. Okay, the last is piling on a little bit.

Now. As a policy matter, we decided as a society in 1986 that the public should have access to emergency services regardless of ability to pay, by means of a federal statute known as the Emergency Medical Treatment and Labor Act ("EMTALA"). So the ER doesn't demand insurance information or cash up front from HYP, which is good, because HYP is unconscious and losing blood rapidly. The hospital just treats HYP. Because really, what is the alternative? Should we as a society say that it's OK to let HYP die? Or do we as a society assume the cost of HYP's care, one way or another?

Because HYP doesn't have health insurance, HYP can't get the negotiated in-network rate from the hospital. In a certain sense it doesn't matter, though, because HYP is of modest means, and couldn't pay even the in-network rate, let alone the hospital's pretend rate for the uninsured (which is another complex issue for another day--what are the hospital's actual losses from uncompensated care).

Patching HYP up even to the point where s/he can be discharged from the hospital is going to take some time. Meanwhile the bills are racking up, up, up. HYP might qualify for "charity care," depending on state law, or HYP can discharge the bills for the uncompensated care in bankruptcy. In either case, we as a society bear the cost when HYP gambles and loses. I personally would rather we bear this cost, as a policy matter, than let HYP die, or create a culture where we encourage our HYPs to just die already to save us all money. Having said that, I would still like to see a better method of risk distribution than we have now.

In the public debate, I see an occasional (well, okay, frequent) strain of blaming the sick for being sick, which I think is quite unfair, for no other reason than that accidents happen (speaking as someone who incurred a catastrophic injury in the blink of an eye last year). And people fall victim to bad genetics all the time.

In the realm of automobiles, Americans as a society have come to accept that accidents happen, that you're not "bad" just because you cause financial losses with your car, you just have to be a responsible adult and make arrangements for the unexpected. We agree as a society (other than New Hampshire, where you live free or die) that the "arrangements" should be auto insurance.

In the realm of bodies, it would make sense for Americans as a society to accept that accidents happen, that you're not "bad" just because you cause financial losses with your body (by having unexpected medical expenses), you just have to be a responsible adult and make arrangements for the unexpected. We clearly do not agree as a society that the answer is health insurance, even though having health insurance can protect other people from catastrophic losses.

I am not sure why.

Perhaps it is because insurance is such a boring subject.

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