Wednesday, February 16, 2011

Individual Mandates as a Moral Imperative


By Raymond H. Feierabend, MD

It’s no secret that the individual mandate is one of the most unpopular and controversial aspects of the new health care reform law.

It’s being challenged legislatively in the Tennessee General Assembly, and legally through lawsuits such as the one recently ruled on in Virginia. Two thirds of Americans say they would like to see a repeal of that provision of the law. Yet, seven in 10 Americans favor restrictions on insurance companies’ ability to deny coverage to those with pre-existing conditions and to rescind coverage when individuals become ill. Unfortunately, as long as our health care system is based largely on the private insurance industry, we can’t have one without the other.

Politically, passage of comprehensive health care reform would not have been possible with active opposition from the industry. Repeal of the individual mandate alone at this time would be vigorously opposed by health insurers and most health care providers, including hospitals and large health care systems.

Economically, without an individual mandate, the cost of insurance for those in individual and small group markets would continue to skyrocket. As the cost of premiums continues to increase, those who are young and healthy would be more likely to opt out, while those who are older and sicker would have a greater need to stay in the system.

As a form of risk management, health insurance limits each individual’s liability by spreading the cost amongst all those who are insured. The larger the pool of those contributing, the more predictable the costs incurred and the lower the premiums needed to adequately cover those costs. It works only if there is a large enough pool of healthy, lower risk individuals paying premiums into the system. If most of those who participate are ill or at high risk of becoming ill, then the cost of coverage for each individual will be much higher. If individuals wait to begin paying premiums until they become ill, they will reap the benefits of the insurance without having paid into it while healthy.

Most of those who refuse to pay for health insurance even when they are capable of doing so are simply gaming the system. They are willing to take the chance that they won’t get sick; if and when they do, it’s unlikely that they will be able to purchase insurance. But that doesn’t mean that they won’t be taken care of when necessary. If they become seriously ill or have a serious injury they will receive medical care, even if they are unable to pay for it themselves. Most hospitals and emergency departments have moral and legal obligations to provide emergency and lifesaving care to those in need, regardless of their ability to pay.

In 2009, community hospitals in this country provided over $39 billion in uncompensated care; more than half of all emergency room care in this country is uncompensated. Once an uninsured individual has exhausted their own resources, which doesn’t take long for most folks with a serious illness or injury, those who are insured and/or pay taxes end up paying for them. By not requiring everyone who is capable to pay into the system, we allow such folks to take advantage of our expensive health care system without paying for it.

There are only a couple of ways to prevent individuals from abusing the system in this way. First, we can require that everyone participate in the system, either by having insurance or by paying a tax or penalty. This can be accomplished via a single payer system supported by taxes, or by including an individual mandate in the current system. Second, we can require those who are able to obtain insurance but choose not to, to sign a waiver foregoing all medical care that is not paid for up front. Hospitals, emergency departments, physicians and other providers of health care services would then be free to deny any care that isn’t paid for, regardless of the seriousness of the condition.

But is that really the kind of health care system we want in this country?
Dr. Feierabend is a professor with the Department of Family Medicine at James H. Quillen College of Medicine at East Tennessee State University.
Copyright (C) 2011 by the Tennessee Editorial Forum. 2/11