Posts Tagged ‘Individual mandate’

The individual mandale, for and against

June 24, 2012

Mitt Romney was for the individual mandate before he was against it.

Barack Obama was against the individual mandate before he was for it.

When Obama was running in the Democratic primary in 2008 against Hillary Clinton, she favored a single-payer system—essentially Medicare for everybody.  Obama as an alternative proposed what he called a public option.  Under that plan, everybody would have free choice of health insurance, but those who couldn’t get insurance, or get affordable insurance, from private companies would have the option of enrolling in a government plan open to everyone.

The public option would operate under the disadvantage of having to take the rejects of the private insurance plans.  But the advantage of the public option would be that a government plan would not have to take out 20 to 40 percent of premiums to for stockholders’ profits (financial analysts use the term “loss ratio” to describe the percentage of health insurance premiums that actually goes to medical care) nor the burden of calculating risk and deciding who to insure and for how much.  I think a public option would have been the best choice.

Once in office, though, President Obama decided to go for a national version of the health insurance plan enacted in Massachusetts when Romney was governor.  This would require everyone to buy health insurance, just as everyone has to buy automobile insurance.  In theory, this would make it possible to keep premiums down because the risk would be spread among a diverse group of people, rich and poor, healthy and sick.  I think this could be better, although I’m not sure it will be better in practice.  But the whole point of the plan is that everybody must enroll.  If you strike down the individual mandate, you no longer have a universal system—which, to my mind, is the point.

Click on What the flip flops on the individual mandate mean for Dems and Repubs for Don Taylor’s thoughts on The Reality-Based Community web log.

The individual mandate is one part of an extremely complicated law.  Click on What exactly is Obamacare and what did it change?  for a clear and objective explanation of just what is in the Patient Protection and Affordable Care Act.

Click on What Is a Medical Loss Ratio? The Check Will Be in the Mail for an article in Forbes magazine about high overhead costs of for-profit insurance systems.

The best book I’ve read on the subject of health care reform is T.R. Reid’s The Healing of America, published in 2009, which examines health insurance systems of different countries and compares them to the U.S. system.  Click on It’s Not a Socialized World After All for a review of the book.  Click on Daily Kos: The Healing of America for a current comment.

The essence of Obamacare

April 26, 2012

Click to view.

I don’t know whether the Affordable Care Act — also known as Obamacare — is a good thing or not.  It could be, but I’m not sure it will be.  But if the mandate that all individuals buy health insurance is declared unconstitutional, then Congress might as well repeal the whole law and start over.

The problem with U.S. health insurance is that we Americans spend more on medical care than the people of any other advanced nation and, in fact, our government spends more than the governments of most nations, and yet we have 47 million people uninsured.

Candidate Barack Obama proposed an alternative, which he called the public option.  The government would set up its own insurance plan which would accept anybody who applied.  The theory was that since (contrary to widespread belief) government systems are so much more efficient than for-profit systems, the public option could still compete even if it had to accept people with pre-existing conditions.  You could choose between a public option where 5 percent or so of premiums went to overhead, as with Medicare and Medicaid, or a for-profit system where more than 30 percent of premiums went to overhead and profit, or you could opt to pay your medical bills yourself (good luck on that!).

In office, President Barack Obama evidently decided that this was not politically feasible.  Instead he supported what became the Affordable Care Act requires everybody to buy health insurance, like it or not, just as state laws require every driver to buy automobile insurance.

For-profit insurance companies have an incentive to spend as little as possible on actual medical care.  The payout to patients is called the “loss ratio.”  The law attempts to get around this by means of regulation.  It requires insurance companies to spend 80 to 85 percent of what they collect in premiums on medical care or improved health.  There are many potential pitfalls in his, including decisions as to what expenses are included in the 80 to 85 percent.  But if this provision really is enforced, the Affordable Care Act could be an improvement over the existing system.

But the new law couldn’t work without the mandate that every individual be required to buy health insurance.  Otherwise the only people in the system would be poor, sick people, and premiums would have to be enormous.

Back in the glory days of Eastman Kodak Co., the Rochester, N.Y., was considered a model for health insurance.  Hillary Clinton came to Rochester to call attention to our good system.  What made it work was that Eastman Kodak Co. allowed its employees to be insured in a community-wide system.  Because Kodak employees were healthy and solvent, that lowered the overall cost of insuring the people of the community.  Later, when Kodak fell on hard times, the company withdrew and set up its own health insurance system.  And now, with the company in bankruptcy proceedings, many of my friends who’ve retired from Kodak are worried about whether they’ll keep their health insurance.  I think it is unrealistic and unfair to saddle private corporations with responsibility for public welfare unrelated to their business.  But that’s another story.

Click on Patient Protection and Affordable Care Act wiki for Wikipedia’s excellent explanation of the provisions of this complicated law.

Click on Medical Loss Ratio: Getting Your Money’s Worth on Health Insurance for an explanation of the Affordable Care Act’s provisions requiring 80 to 85 percent of premiums be used for actual medical and health costs.

Click on Supreme Court and Obamacare for an argument as to why the Affordable Care Act is constitutional.

Click on Obamacare Has Already Transformed U.S. Health Care for Business Week’s analysis of the impact of the Affordable Care Act.

Click on What Mitt Romney Would Do In Place of Obamacare for a speculative article analyzing Governor Romney’s campaign statements.

Click on Why I Do Not Like Providing Health Insurance to My Employees for an argument against employer-provided health insurance.

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The Founders’ individual mandate

February 4, 2011

Opponents of the Affordable Care Act have filed suit challenging the constitutionality of the individual mandate – the provision that requires all Americans to buy health insurance.  Some federal courts have decided that it is constitutional, others that it is unconstitutional, and the issue probably will go to the U.S. Supreme Court.

John Adams

But as early as 1798, Congress enacted, and President John Adams signed, a law requiring Americans to pay for government health care.

Under the Act for the Relief of Sick and Disabled Seamen, the U.S. government created a Marine Hospital Service, a network of government hospitals for seamen, later expanded to cover boatmen on the Ohio and Mississippi Rivers.  Seamen were required to pay a tax of slightly over 1 percent of their pay; American ships were not allowed to leave U.S. ports unless the tax had been collected.  When a sick or injured seaman needed medical care, the employer gave him a voucher certifying his tax was paid up.

Click on Congress Passes Socialized Medicine and Mandates Health Insurance – In 1798 for an article by Rick Ungar in Forbes about the early health insurance precedent.

Click on Sailors’ Health and National Wealth for background on U.S. and British maritime hospitals in the 18th and early 19th centuries.

You could argue that there is a difference between a tax to support a government service and a requirement to buy a product from a private company.  An example of the latter would be the Militia Act of 1792, which required every able-bodied white male citizen between the ages of 18 and 45 to purchase firearms and ammunition at his own expense and be available for military service when required.

Here is the relevant portion of that law.

I. Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That each and every free able-bodied white male citizen of the respective States, resident therein, who is or shall be of age of eighteen years, and under the age of forty-five years (except as is herein after excepted) shall severally and respectively be enrolled in the militia [and] … That every citizen, so enrolled and notified, shall, within six months thereafter, provide himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch, with a box therein, to contain not less than twenty four cartridges, suited to the bore of his musket or firelock, each cartridge to contain a proper quantity of powder and ball; or with a good rifle, knapsack, shot-pouch, and powder-horn, twenty balls suited to the bore of his rifle, and a quarter of a pound of powder; and shall appear so armed, accoutred and provided, when called out to exercise or into service  ….

Click on The Militia Act of 1792 for the full text.

Click on The Civic Roots of the Individual Mandate for an article about the Militia Act by Jack M. Balkin on his Balkinization web log.

All this makes for interesting talking points, but, as far as I’m concerned, neither here nor there concerning the merits of the Affordable Care Act.  We can’t know what the Founders would have thought of it, and we have to decide for ourselves.

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