Part 1 of an ongoing series. See also: “Healthcare 101: Ride for Free“
For the past week the media has been abuzz with talk of the Affordable Care Act, affectionately known to most of us as “ObamaCare”. The source of this buzz is the fact that the legal challenge to the individual mandate provision of the sweeping healthcare law has reached the Supreme Court. This week that very provision goes to oral argument before the justices, and the media-fueled rhetoric around it has been heated. I’d like to take a moment to point out the obvious just for the sake of my own conscience.
First, I do understand the reticence many people have about the individual mandate. “The Govt is gonna’ tell me what to do & what to buy?? Oh hell naw. Next thing you know, we’ll all be wearing jumpsuits & eating broccoli!” This was my own basic & flawed thinking on the topic prior to the 2009 healthcare debate, which is why I supported candidate Obama’s approach over candidate Clinton’s. But in the end that healthcare debate did indeed change my mind & here’s why in plainish English:
If we’re going to have a system of privately issued insurance (which we do have, and which the govt has made no moves to get rid of), we run into a basic problem: healthy people don’t wanna’ buy it. To be specific, young & healthy people in particular don’t see the point. It’s a bad investment – I feel good, I take care of myself, the odds of being hit by a car are low so, I’d rather spend my money on beer. This is actually pretty sound logic if you’re young & have no medical problems.
If you’re old or sick, however, you desperately need medical insurance. Why? Because the out-of-pocket costs are prohibitively expensive for the average humanoid. What naturally tends to happen to insurance markets then is they become dominated by sick people who use up lots of insurance services, with relatively few healthy people to offset the cost. This automatically breaks the system. The only way insurance works is if a hundred of us buy fire insurance and when one of us loses a house to a fire; the insurance company can use the money collected over years from all hundred of us to pay the damages. If 50 or 60 of us have house fires, the system can’t work.
Private health insurance can only operate if the preponderance of participants are in fact HEALTHY. This is why Insurance companies don’t want to insure the sick – the infamous “pre-existing” condition clause. And if you were an insurance company, frankly, you wouldn’t either. The math doesn’t work out. But you’re not an insurance company, are you? You’re probably a soft, carbon-based lifeform that’s thinking about eating a chocolate bar right now. In which case, if you determine you need health insurance you don’t want to hear from every company you call that, no, we won’t cover you because you have, say diabetes. And if you do have diabetes that is EXACTLY what you’re likely to hear if you try to buy insurance. In the midst of the Great Recession if, like many Americans, you lost a job that used to cover you and now you’re in the healthcare market on your own, you’re pretty much screwed. Pre-existing condition = no soup for you!!
Well, since we all hate the pre-existing condition clause, why don’t we just get rid of it! Great idea! With a small caveat…if you get rid of it, how do insurance companies stay solvent & capable of providing the insurance promised (instead of weaseling out of covering bills as some have been wont to do)? Remember, only sick people and old people (who by virtue of being old, are more likely to eventually become sick) are interested in buying health insurance. The answer: you mandate that “everyone” buy insurance, thus giving insurance companies the mathematical liberty to actually get rid of practices like the “pre-existing condition” & denial of coverage.
The “conservative” argument against this, of course, is that it’s an infringement upon freedom: Why should the government be able to force me into a market I don’t want to be a part of, just because I’m “alive”? Aside from the fact that the individual mandate is, in fact, a 20-year-old Republican policy proposal, this argument is fundamentally flawed because like it or not, you ARE a part of the healthcare market, and sad as it may be…it’s just because you’re alive! This is the argument that the government is going to make in support of the healthcare law and it is the correct argument. In part two of this post I will explain why. First I need to go grab a chocolate bar.
Derrick N. Ashong