"The importance of the individual mandate."

[Clio the Leo]

The importance of the individual mandate

Pick your favorite system. Socialized medicine in Britain. Single-payer in Canada. Multi-payer with a government floor in France. Private plans with heavy public regulation in Sweden, Germany and elsewhere. None of these plans are "voluntary." In some, there's an individual mandate forcing you to pay premiums to insurance companies. In some, there's a system of taxation forcing you to pay premiums to the government. In all of them, at least so far as I know, participation is required except in very limited and uncommon circumstances.

Holding the price of insurance equal, insurance is gamble on both sides. From the insurer's perspective, it's a better deal to insure people who won't need to use their insurance. From the customer's perspective, it's precisely the reverse.

Right now, the insurer sets the rules. It collects background information on applicants and then varies the price and availability of insurance to discriminate against those who are likely to use it. Health-care reform is going to render those practices illegal. An insurer will have to offer insurance at the same price to a diabetic and a triathlete.

But if you remove the individual mandate, you're caught in the reverse of our current problem: The triathlete doesn't buy insurance. Fine, you might say. Let the insurer get gamed. They deserve it.

The insurers, however, are not the ones who will be gamed. The sick are. Imagine the triathlete's expected medical cost for a year is $200 and the diabetic's cost is $20,000. And imagine we have three more people who are normal risks, and their expected cost in $6,000. If they all purchase coverage, the cost of insurance is $7,640. Let the triathlete walk away and the cost is $9,500. Now, one of the younger folks at normal cost just can't afford that. He drops out. Now the average cost is $10,600. This prices out the diabetic, so now she's uninsured. Or maybe it prices out the next normal-cost person, so costs jump to $13,000.

This is called an insurance death spiral. If the people who think they're healthy now decide to wait until they need insurance to purchase it, the cost increases, which means the next healthiest group leaves, which jacks up costs again, and so forth.

Kill the individual mandate and you're probably killing the bill, too. The mandate is what keeps average premium costs low, because it keeps healthy people in the insurance pool. It's why costs have dropped in Massachusetts, not jumped. It's why every other country with a universal health-care system -- be it public or private -- uses either a mandate or the tax code.

http://voices.washingtonpost.com/ezra-klein/2009/12/draft_1.html

[Oregone]

1. Single payer in Canda does not mandate individuals enter the marketplace and engage in commerce

They pay taxes and its but amongst the government services they are provided with (like military and police protection).

[ThePhilosopher04]

2. Big difference...

between paying taxes for a government run, not-for-profit, single-payer system, versus being forced to pony up to private industry, which is by definition, profit driven.

[Kurt_and_Hunter]

3. There has to be price regulation, though

I have always supported the mandate as a necessary part of a comprehensive approach. The money of the young and healthy is supposed to flow to a centralized pool of money to offset the costs of the old and sick.

But without capped prices and/or a government system the mandate is a mandate to buy at whatever some private entity feels like charging, and with no guarantee that profits from your policy will be turned into lower costs for someone else.

[denverbill]

4. Fine. Use the tax code.

Let the government pay whichever insurance company I choose if you want a mandate. Let the rich pay for the unemployed.

[Bluenorthwest]

5. Our peer nations that 'mandate' also classify profit making

on basic health care delivery to be a crime. With this plan, that profit is the central goal. We know how things work in other countries. None require payments to for profit companies with no other choice.
They just don't.
So comparing apples to turds is what this is. Ezra's specialty.

[damntexdem]

6. The individual mandate is essential to any real HCR short of universal enrollment.

But the emerging Senate bill doesn't give enough in return to offset the burden of forcing people to buy a for-profit industry's products.

And single-payer and public-provider systems DO NOT have individual mandates -- yes, all pay through taxes, but no one is forced to pay to enroll.

[nykym]

7. That would be Ok with me

if there were actual cost controls set to kick in immediately. As we all know all Health Insurance providers have already threatened to increase premiums up 120% of current cost (as best i can remember) and some have even said they will be cutting up to 500,000 customers so as to remain profitable. Get it PROFIT!

[optimator]

8. fascism is never justified

"other countries do it" is not validation.

No government has the right to force citizens to buy a corporation's product.

[twiceshy]

9. Agree completely.....

This just cannot be Constitutional. If they can make me buy an Ins. Co's Health Policy, can they also make me buy a Chevy Volt? It's illogical and perverse.

[OneTenthofOnePercent]

11. +1 ... it sets poor precedence.

Say the economy takes another downturn in the future and US treasury bonds are getting too weak... precedence like insurance mandates would let congress mantdate things like people buying bonds to keep the Fed afloat. Buy $5000 bonds or be fined $5000. Sure, it might be in the best interest of the citizens to keep the government funded, but congress has no power to force people to partake in commerce.

It might have the same end effect of "taxing" but I'd rather congress go about taxing people.
No use calling madates something they're not.

edit: typo

[OneTenthofOnePercent]

10. I support the Tax avenue... not the Mandate approach.

I feel congress mandating consumers to buy products is outside of it's powers.
Not only that, but I feel it sets a poor and potentially dangerous precedence. (aka: slippery-slope)

However, congress does have the power to raise taxes for the general well-being of citizens.
They should use this avenue - plus taxes can be adjusted to income more easily, I feel.

[Mass]

12. Why is it that people miss the point so often??

Single payer system and highly regulated insurance systems have mechanisms to keep prices low. Most of them involve getting people to pay according to their means, not a flat fee or according to their needs.


Klein should know better than that, and, in passing, it is first news that premium got lower in MA.

[Armstead]

14. Yes they should be asking us people in Mass how that;s working

[Mass]

15. Here are a few stats

http://www.boston.com/news/health/articles/2009/08/22/bay_state_health_insurance_premiums_highest_in_country/

The report by the Commonwealth Fund, a nonprofit health care foundation, showed that the average family premium for plans offered by employers in Massachusetts was $13,788 in 2008, 40 percent higher than in 2003. Over the same period, premiums nationwide rose an average of 33 percent.
....
Now, the Commonwealth Fund report projects that without significant cost reforms, an annual family premium in Massachusetts will soar to $26,730 by 2020.

I am not sure people want to go back where they were (in fact, polls show the opposite), but it does not mean that the result is not a mixed bag.

[Armstead]

13. All the more reason they should gone for some kind of PUBLIC PROGRAM

That hits an essential crux of why private for-profit insurance is so abusive -- Because if they were in the business of actually providing coverage at a reasonable cost they;d go broke.

Trying to tinker with that is a losing game because the basic gane is systemically biased against the end user.

That;s the diffefrence between a ;public program. It is not only because they are not seeking profits, but they also have more leeway and motive to actually provide service. They have to keep expenses in line, but that is secondary.

If connected to a public program a mandate would make sense -- because people are paying into a coverage pool based on serving their own interests as well as the overall public interest. That is not merely a symbolic difference.

[rug]

16. The difference is there they are mandated to get actual insuramce.

[Odin2005]

17. Forcing people to pay private corporations is FASCISM!

[DuaneBidoux]

18. There is one alternative: a TRUE death room in the emergency room.

If you don't have insurance and you show up to be treated you are simply shuffled off to a nice little area where you can bleed to death on your own.

Otherwise it is like having an accident with someone who doesn't have auto insurance: you end up (in this case WE end up) paying for it.

[BlueIdaho]

19. None of the health care systems mentioned here use for-profit health care providers.

I'd call that a big difference.