Insurance regulations won't work without a mandate

[liberalpragmatist]

I understand why the mandate could prove unpopular, which is why I hope there's a robust hardship exemption for people who don't qualify for subsidies but still can't afford care.

But there's a very important reason why you need an individual mandate - without it, the insurance regulations don't work. If insurance companies are required to cover preexisting conditions, have to charge everyone the same rates regardless of their health conditions (community rating), then everybody has to be covered. Otherwise, there's adverse selection, and healthy people can opt out, which would drive costs up for the people remaining.

This is why both Hillary Clinton and John Edwards supported an individual mandate during their campaigns. Obama opposed it but acknowledged in a TIME magazine interview that he basically changed his mind because he couldn't otherwise figure out how to get the insurance regulations to work.

All universal health care systems require universal enrollment. Of course if there's single-payer than people aren't forced to "buy" insurance, but in most systems you pay for it through taxation, and not just taxation of the rich but broad taxes, such as a sales tax. In countries like Germany, you are required to purchase care from a sickness fund (provided you aren't covered by their public plan - reserved for certain categories of workers), and the cost is split between you (premiums), your employer, and the government.

[Laelth]

1. I simply do not accept this argument.

We don't need to "regulate" the insurance companies at all. Just set up a big, publicly financed and backed, public option that does not practice pre-existing condition exclusions, rescission, or lifetime caps. The insurance companies will either 1) reform their own practices voluntarily to keep their customers, or 2) go out of business because most people will switch to the superior public option.

We don't need the health insurance industry's agreement or participation at all.

Nor do we need the individual mandate. This plan does not need to be (nor should it be) revenue neutral. We passed Bush's tax cuts for the wealthy, and nobody cared. We invaded Iraq and wrote a blank check to cover the costs, and nobody cared. We wrote a blank check to AIG and the banks through TARP, and nobody cared--not much, anyway.

Now that a Democrat wants to do something good for the American people--now, all of a sudden, we're concerned about the deficit? imho, if we have enough money to kill Iraqis, we have enough money to provide health care to all Americans. And I don't care what the irrelevant Republicans think. Nor do I have any interest in balancing the budget or tackling the national debt during a recession. Now is the time for the government to spend money, not collect it.

:dem:

-Laelth

[Justitia]

5. Agree on all points. -eom

[juno jones]

11. ...

Well said. We have money to murder and none to heal. What a bankrupt society.

[Egnever]

15. We dont have money to murder

Thats a big part of our problem. That money is borrowed.

[juno jones]

17. That's an even more uncomfortable truth.

So what happens when we cannot pay our overlords, ahem I mean, lenders?

The whole business makes me uneasy.

[Sebastian Doyle]

2. Nobody should be "mandated" to keep filty pig criminal bastards rich.

If the insurance business was prohibited by law from being "for profit" as it is in other countries that have such a thing as private insurance, that would be different.

It's bad enough we pay taxes that go to Halliburton, Exxon, and Blackwater. Now you want to force me to pay for some insurance criminals 12th mansion on top of that?

[ddeclue]

4. +1E6

[jtrockville]

8. IF they operated without profit AND had a cap on executive compensation, THEN

it would be a good plan. Non-profit is not enough.

[aint_no_life_nowhere]

3. Will a mandate reduce the costs of medical services?

I'm not talking about reducing the costs of policies and premiums with the insurance companies. I'm talking about driving down the amount a doctor can charge, the amount a hospital can charge for a night's stay, the amount of a surgery, an MRI, or an EKG. Besides the high cost of health insurance (which is astronomical right now in my opinion), I'm waiting for solutions that drive down the cost of basic medical services, whether insurance is present or not.

[andym]

6. Just need more regulation to create a basic comprehensive policy with a premium cap n/t

[depakid]

7. What a ridiculous thing to say

Insurance mandates have been working for YEARS in states all across the nation.

Sounds to me like someone needs to do a 'lil homework before shooting off their mouth.

[liberalpragmatist]

9. If anybody can opt out, then there is adverse selection

Period. There is nothing remotely controversial about that.

I can understand wanting single-payer. But if you don't have single-payer, then you need to require everybody to get health coverage or else there is adverse selection, which is what every country that doesn't use single-payer does.

ON EDIT: Here is a Paul Krugman column that makes exactly this argument against then-candidate Obama's health care proposal (which at the time did not include a mandate):

The central question is whether there should be a health insurance “mandate” — a requirement that everyone sign up for health insurance, even if they don’t think they need it. The Edwards and Clinton plans have mandates; the Obama plan has one for children, but not for adults.

Why have a mandate? The whole point of a universal health insurance system is that everyone pays in, even if they’re currently healthy, and in return everyone has insurance coverage if and when they need it.

And it’s not just a matter of principle. As a practical matter, letting people opt out if they don’t feel like buying insurance would make insurance substantially more expensive for everyone else.

Here’s why: under the Obama plan, as it now stands, healthy people could choose not to buy insurance — then sign up for it if they developed health problems later. Insurance companies couldn’t turn them away, because Mr. Obama’s plan, like those of his rivals, requires that insurers offer the same policy to everyone.

As a result, people who did the right thing and bought insurance when they were healthy would end up subsidizing those who didn’t sign up for insurance until or unless they needed medical care.

In other words, when Mr. Obama declares that “the reason people don’t have health insurance isn’t because they don’t want it, it’s because they can’t afford it,” he’s saying something that is mostly true now — but wouldn’t be true under his plan.

Link: http://www.nytimes.com/2007/11/30/opinion/30krugman.html?_r=1&hp&oref=slogin

[Liquorice]

10. I agree. Krugman was right about mandates. nt

[depakid]

12. Leveling the playing field with coverage mandates prevents adverse selection!

That's the point!

There are dozens of mandates that all insurers in given states have to follow for every policy that they write. They include anything from mamograms to diabetes care.

Some of the more recent ones have been passed in Illinois and Pennsylvania by the Autism Society of America.

Check it out:

http://www.autism-society.org/site/News2?page=NewsArticle&id=11601

[liberalpragmatist]

13. And if they only cover the most expensive patients...

... because they have to accept them, then the costs per individual go up. Insurance works by pooling people, and if you have an expensive, high-risk pool, it will cost more per person.

[depakid]

14. I get what you're saying- now get what I'm talking about

Insurers in America use adverse selection (like not covering various needs for diabetic patients) in order to keep people with chronic conditions off of their rolls.

One reason they do this is because the bean counters know that it's less expensive to pawn off the eventual amputation or vascular dementia to another carrier- or to Medicare.

Mandates make certain that every company has "floor level" coverage- they can't play those games with certain patients with certain conditions. Who gets coverage mandates depends on both the political clout (prevalence plays a role here)- and the intelligence and political insight of the people who work in the non-profits representing them.

Some chronic conditions are "more deserving" than others- at least, that is how the game is played throughout the states.

So they get coverage mandates- while other folks (and children) suffer.

[Egnever]

16. Exactly right

Single payer is a mandate. All are covered, all pay taxes into it.

I have to admit though that I know this in my head to be true yet the word mandate makes me dislike it.