Last week another court decision by 11th circuit Court of Appeals came down against a key provision of the health care reform bill: the individual mandate. The individual mandate states the obvious and the somewhat subtle: that all people must buy health insurance of one kind or another. It is a key portion of the health care bill, and it is an unstated fact that if this portion is struck down, the rest of the bill is very close to moot also. And here’s why:
Insurance – as I harp on from time to time – is derived from a common risk pool. If enough people throw in premiums, the pool stays stable with reasonably low premium rates. If the pool shrinks or becomes too fluid, premiums rise – especially if the pool is in less-than-optimal health. There are two kinds of cherry-picking that the insurance industry is subject to, both of which are equally toxic to a healthy population and a sustainable health care system. The first type of cherry-picking is the one we know and love to hate: the subjective picking of patients by insurance companies for who deserves one of their policies. Picking ostensibly healthy patients to sell policies to is not the only means that insurance companies cherry-pick their insurance pool; they also limit coverage of pre-existing conditions, place boundaries on the scope and caps of coverage, and engage in a merciless practice known as “rescission,” cancelling a policy once a person gets sick (a practice made easier by the tight connection between employment and health insurance in the US).
But buyers of insurance have also been known to cherry-pick their own needs; I’ve done it myself. Though it was not my intention or my desire, I opted out of insurance coverage for three years when I was young and healthy and had no particular reason to spend an inordinate amount of time trying to obtain and pay for coverage once I was booted off my parents’ insurance. This phenomenon is a large part of the astronomical rise in premiums today: the exodus of the healthy young class – which pays in but do not typically draw out until much later – is no small part of the destabilized premium pool (there are many other reasons too, notably including record profits on the part of insurance companies). This is hardly the fault of that group of people, most of whom would probably rather have insurance but are more prone to being part of the marginally employed class, but the effect is hard to miss.
The health care reform law sets up a new dynamic: one set of rules nixes out the ability of insurance companies to cherry-pick their customers – pre-existing conditions are out, and they must take anyone who applies. At the same time, the individual mandate states that every person must contribute their share, every month along the way. This is the founding principle of all universal care systems: everyone contributes, everyone has coverage, the pool stabilizes.
But if one leg of this stable table is removed, the whole thing collapses. The only aspect of the law deemed unconstitutional in this latest round was the individual mandate; the rest stands. If this stands, people will literally be able to wait until the day they are diagnosed with cancer, and then obtain insurance immediately without ever having paid into the pool. This may be very handy for patients, but it turns the very idea of insurance on its head.
This is not sustainable. By flipping the traditional cherry-picking to favor the patients’ side without a firm cap on premiums, there is only one result that will occur, and it is extremely predictable: premiums will rise at a rate faster than you have ever seen before. So while it may seem like a fine idea to allow people the option of buying after-the-fact disaster coverage, in fact we will all pay for it in unequal measure: those responsible enough to carry insurance will bear the long-term brunt, those who choose to buy it at the last minute will suddenly realize what premiums of several thousand dollars per month feel like.
The individual mandate is one half of the social contract built into the health care reform act; the mandate to take all comers and end the practices of limiting pre-existing conditions and the like is the other half of the social contract. Without both, the whole thing falls apart. We know this because we live in a system right now where half of this social contract has simply never existed, with the predictable consequence of tens of thousands of deaths per year attributed solely to the lack of insurance coverage.
But this points to what I have always thought was a fatal flaw in the health care reform act to begin with: forcing Americans to buy private (and often for-profit) health insurance never seemed like a good idea. I fundamentally object to the government enacting a law forcing me to buy from Aetna, BlueCross, or United Health – and not because I’m a libertarian (at all), but because I object to being forced to contribute to the private cash generation machinations inherent to modern insurance companies (even the non-profit ones do not exactly act in the public interest). I get to vote on public policy, which is why I’m alright with Medicare, the VA, Medicaid and the like: in the end, these entities are beholden to the American voter. Being forced to buy from a private (especially for-profit) company feels a lot like a violation of basic conflict of interest rules to me, and I can’t really blame the rest of America – for liberal or libertarian reasons – for feeling a similar unease. We’ve all become accustomed to the public pooling of funds that supports roads, schools, and the like, and it takes very little imagination to guess how we might transform that into a public health care system.
But the social contract – everyone contribute, everyone be covered – remains an imperative part of universal health care, as it is in every country where it has been achieved. The likely result of this week’s decision is that the law will be forced to go before the Supreme Court, should the Supreme Court choose to hear it. And with only rudimentary understanding of constitutional law under my belt, I can imagine this could legally go either way. If the individual mandate is struck down, we all go back to square one, maybe with a different or better vision in mind: perhaps one based on our all-American versions of care-taking – Medicare, Medicaid, the VA, the Indian Health Service, and the like – or something new altogether. But always with that same objective in mind: this will only work if we are all in it together.
Cross-posted from my recently relocated and relaunched blog, America, Love It or Heal It.