Mandated health insurance isn't really necessary, and is politically disastrous

[HamdenRice]

The main argument for mandatory insurance, private or public, is reasonable and it is in the abstract sense desirable. But the costs outweigh the benefits -- the costs to people who can barely afford it, and the political costs to Democrats in passing it.

The basic argument is that we don't want healthy people not paying into the system, then getting sick, and getting benefits. This relies on the idea that insurance is "cost spreading" in which healthy people pay for sick people.

The economic problem with this argument is that health insurance is not like fire insurance. Fire insurance is pure insurance; you only use it when there is a fire. Owners of unburned property pay for burned properties.

But health insurance is both a system of insurance and a system of savings. When you buy a health insurance policy, you are buying protection against getting hit by a truck or getting cancer, and you are also buying something like a Christmas Club, putting away money for the routine checkups, flu shots, ob-gyn exams, and minor procedures that we all definitely will have. That's not insurance; that's savings, and it's a big part of a good health insurance plan. Most of us will not get hit by trucks, and our biggest health expenses will be in our last years of life.

People who don't buy insurance are pretty financially in the same position whether they pay for checkups through insurance or out of pocket. In fact, what makes the system so atrocious, is that because of insurance company profits, you are actually better off paying for routine health care out of pocket than paying premiums that are skimmed for profits, and moreover, running the risk of having your insurance company screw you over, with regard to some of the expenses of routine care -- assuming you have the ability to save, which most of us don't, unless we're force to through payroll deduction (ie insurance again).

The big reason for getting everyone in is the catastrophic cases, but many of these can be eventually paid down by premiums. That means that one way of enrolling people, actually is to wait until they get sick or hit by a truck. Most younger people who get sick, get better. Let them "free load" if they think they can't afford it. When they come into the hospital after getting hit by a truck, sign them up, and make them stay in program at least until they have paid back in premiums what they took out when being signed up. In fact, this is the way it has come to work somewhat informally in New York. Many people are uninsured, but when you go to the emergency room at a decent, public hospital, they sit down with you and sign you up for various public and subsidized insurance plans.

Most people will get better, continue to work, and eventually pay off whatever they took out of the system.

A penalty for not signing would be a political disaster, as well as a hardship for many families. Moreover, the same incentive can be achieved simply by giving a tax deduction for health premiums. Those who don't pay premiums would obviously not get the deduction. It's kind of similar in incentive to a penalty, but instead of saying, "we're fining you for not buying insurance" they would be saying, "you can't get this deduction because you're not buying insurance."

Same exact financial impact on the taxpayer; no punitive component.

[TheKentuckian]

1. Food for thought Hamden...Food for thought

That might be a way out that I haven't seen.

[Phoebe Loosinhouse]

2. I understand why some people think mandates are necessary

in order to increase the pool and spread the costs. I also understand that a mandate should only apply if the costs were so low that it would not be considered a burden by most. (For instance, I keep hearing that Canadians pay $700 a YEAR for their insurance and I think that was a family. If we have reform and we still have outrageous costs, only now with mandates, it will truly be the worst of all possible worlds.

So, I think, number one, costs HAVE to go down. Whether through negotiation, regulation, savings, whatever. I keep hearing that families seem to be paying about 1200 -1500 a MONTH for insurance premiums. So, I think it should be 1/3 of that (and that's still way too high if you look at Canada)

Then I think that insurance should not be mandated, but it should be structured in such a way that there would be an actual consequence if one did not enroll. The idea that I came up with is a delay before benfits kick in. If you knew that you enrolled, and then began paying benefits, but your actual coverage did not start until six months later, then you would be paying a penalty for not enrolling - six months of non-coverage. You could amass some really big bills in six months time. So, it would be up to the individual to determine "how lucky do I feel?" in terms of initiating coverage. That is what is called a moral hazard - you suffer the consequences of your decision.

The more we talk about all this stuff, the clearer and clearer it becomes that single payer is the ONLY sane, moral, fiscally responsible answer to the question. I am embarrassed for my coutry that we are exposed as such nitwits that we do not have the will or the common sense to commence it immediately.How can we be the Leader of the Free World and an example to all if we sacrifice our citizens and our national budget to STUPIDITY?

[HamdenRice]

3. Interesting ideas, but I don't think benefits can be delayed

If someone "feels lucky" but gets hit by a truck, they need to be treated and their care financed. It's better to recoup the costs later.

[iceman66]

4. Universal coverage = mandates.

We can't have it both ways.