Born Weird

I’ve been meaning to write a comprehensive post on the whole health care reform thing — integrated with a review of The Healing of America — but circumstances have conspired against that happening. Maybe later.

In the meantime I’d like to briefly address one of the most controversial parts of the health care reform bill (better characterized as a “delayed health insurance tweaks” bill): the individual mandate. You know, the part that says you have to buy health insurance.

It’s taken quite a bit of heat from both the left and the right, for everything from curtailing freedom  to propping up corporatism.

I get those complaints. The idea of being forced to buy something, of having the government make you give your hard-earned money to a for-profit business, stinks. I don’t care for it. But fundamentally, what makes it problematic is not the fact that having insurance is mandatory, it’s that the insurers are for profit.

The most significant thing the new bill does is put an end to many forms of insurer cost-shifting and avoidance, such as rejecting those with pre-existing conditions and setting annual and/or lifetime caps on claims. This is a major change and corrects some of the most reprehensible aspects of our current system. The problem with this, however, is that it threatens to seriously up insurers’ costs.

Critics of the bill rightfully point out that the bill does very little to actually control costs, instead simply doling out subsidies to those who need help paying premiums and encouraging a bit more competition via state-based “exchanges.”

But the individual mandate is actually a significant check against rising costs. To force insurers to cover high-cost individuals without guaranteeing a pool of lower-cost customers would be to send premiums up faster than ever. The individual mandate helps ensure that healthy individuals who might not choose to be covered otherwise still enter the pool, offsetting the expensive folk.

This is a key reason why countries that provide government insurance can actually afford to do so: they collect premiums (or taxes) from everyone, including the healthy, which defrays costs for the sick. The math just doesn’t work out if healthy people can opt out. It’s unsustainable.

I agree that compelling people to give money to private, for-profit enterprises is a terrible idea. But fundamentally the problem is not with the compulsion, which is ultimately necessary, it’s with the who. There need to be guarantees of viable non-profit options (doesn’t really matter if they’re public or private) so that we’re not being forced to give money to shareholders.

Feel free to attack the bill for its many shortcomings, but the mandate isn’t the problem — it’s the lack of appropriate choices for what to do under the mandate.