Health care
In the new health care bill released in the Senate, among other provisions, two are that insurance companies can no longer discriminate based on preexisting conditions (guaranteed issue), and individuals will be required to buy insurance (individual mandate). If they don't, they will be subject to a $95 penalty in 2014 and it goes up to a $750 penalty in 2016. To understand why this penalty is insufficient, we first need to understand why these two principles don't work unless both are in place.
If you were forced to buy insurance but insurance companies still had the option not to insure you, you could then be punished for something you can't control. Requiring someone to do something does no good if they are unable to do it. For an individual mandate to work and be fair, we need to make it so everyone is able to get insurance, so we have a provision that insurance companies cannot discriminate based on preexisting conditions
On the flip side, if we just prohibited insurance companies from discriminating based on preexisting conditions and didn't require individuals to buy it, people would just go without insurance and get it only if something happens, making the risk 100%. Put simply, right now, the worst case scenario is ending up needing insurance but not buying it first. Never buying it and never needing it is the best case scenario. Buying it and never needing it is better than buying it and needing it (either way you're paying, better to pay and not get hurt).
If we add in no discrimination based on preexisting conditions, the best case scenario still is never buying it and never needing it. But, something important has changed. The worst case scenario has become the second best case scenario. Now, if you don't buy it first but need it, it's no problem, you can just go get it. If you buy it first, you could have saved money waiting it out. You may argue that not needing it but buying it is the second best, and that might be true, but that doesn't change the problem. If you end up not needing insurance, your optimal strategy is not to buy it. If you end up needing insurance, your optimal strategy is not to buy it first. So we have an individual mandate to make people buy insurance first. For the individual mandate to work, the penalties need to be high enough that you will be better off paying the full price for insurance than paying the penalties and not get insurance.
$750 is insufficient to make this work. Since insurance costs much more than that, many people will just pay the $750 penalty and not buy insurance. They would be able to get insurance if something happened, so people will just wait it out and pay the fee. I am not arguing whether or not guaranteed issue and individual mandate are the right thing to do, I am simply saying the effects demonstrate that one cannot exist without the other, and for one to exist the other needs to exist equally as strongly.
Then we can't have guaranteed issue either
Comments
Don't agree with individual mandate of any sort. The argument that makes me go crazy is those who say healthcare is a right and then in the same breath declare that we should all be required to have insurance. For the sake of the argument, lets say healthcare is a right; should I not have the opportunity to exercise (or in this case, not exercise) said right? By the way, I'm not saying you are one of those people...just venting. Nice piece
There is no way to discuss an individual mandate *without* also discussing its morality. And requiring people to buy insurance is morally equal to denying them the right to refuse medical treatment.
I foresee a very serious backlash in the U. S. if the individual mandate passes into law. Long before SCOTUS rips it out as unconstitutional, a lot of people will have found themselves in an impossible situation and rebelled the only way left to them -- refuse to buy insurance and refuse to pay the fine.
I already have plans to do just that.
will you then opt out of emergency care?
Ben says:
will you then opt out of emergency care?
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I'll continue as I have been doing; paying as I go.
ok, so you'll pay the full cost of emergency care if you ever need it?
Ben says:
ok, so you'll pay the full cost of emergency care if you ever need it?
November 22, 10:47 AM
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I might have to "pay it out" or use a credit card, but yes. I do not buy insurance.
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