Monday, December 20, 2010

Will Force or Favor Make People Buy Health Insurance?

The mandate that everyone buy health insurance by 2014 is facing a lot of legal challenges. Recently, a federal judge in Virginia decided that the mandate is unconstitutional. There are currently 24 lawsuits challenging various aspects of the Patient Protection and Affordable Care Act, according to a chart created by the Washington Post, with the insurance mandate a top source of friction.

Having both healthy and ill people purchase health insurance distributes the cost of care among both. A responsible society shares expenses for the common good. We don't expect children to pay for their public school education, for example, but expect that they will pay it back when they use their education to get jobs and become tax-paying adults themselves. Similarly, if we want to expand and secure access to health care, we need to all contribute to the expense - even if we are not deriving immediate benefits from our contributions. At some point in our lives, as injuries and illnesses occur, all of us will probably cost insurers more than we are currently contributing in premiums, and we will depend on the contributions of healthier people to cover the cost of our care.

But how do you make sure that enough healthy people purchase health insurance to adequately distribute these costs? Since legislation, now being challenged in the courts, might not work, Fierce Healthcare ran an article on some ways to pay for health care reform even without the individual mandate. Fierce Healthcare drew on a Kaiser Health News story ("Experts Ponder 'Plan B' Options For The Individual Mandate") for ideas, such as:
  • Use taxes as an incentive. Raise taxes, then give tax breaks to people who have purchased health insurance.
  • Use premium cost as an incentive, as suggested by former CMS director Gail Wilensky. Increase the cost of health insurance for several years for people who do not purchase it when they are first eligible. 
  • Use a waiting period as an incentive, as suggested by sociologist and senior health advisor Paul Starr. Prevent those who opt out of insurance from purchasing subsidized insurance on the insurance exchange for several years. Insurers also would not be required to cover those who opt out if they had pre-existing conditions.
As these ideas demonstrate, where persuasion doesn't work, stricter financial penalties often do.

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