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Should Health Insurance Be Mandatory?

By admin | June 6, 2009

June 4, 2009, 7:43 pm

By The Editors

Updated, June 5, 11:40 a.m. | Karen Davenport, director of health policy at the Center for American Progress, offers a view on the politics of mandatory health coverage.

Updated, June 5, 11:10 a.m. | Charles P. Mouton, chairman of the Department of Community and Family Medicine at the Howard University College of Medicine, makes the case for universal coverage.

President Barack Obama said this week that he is now open to Congressional proposals that would make every American responsible for getting health care insurance. In a letter to Senators Edward Kennedy and Max Baucus, he wrote that employers would have to share in the cost and that there would have to be a hardship waiver for those who could not afford insurance.

During the campaign last year, he opposed such a broad individual mandate, which Hillary Rodham Clinton supported. At that time, he argued for a more incremental approach, requiring that children be covered first.

Is a broad mandate that Americans have medical insurance a workable way to begin health care reform? Would taking a bolder step be more efficient or more disruptive?

·                                 Karen Davenport, Center for American Progress

·                                 Stuart M. Butler, Heritage Foundation

·                                 Marcia Angell, Harvard Medical School

·                                 Grace-Marie Turner, Galen Institute

·                                 Charles P. Mouton, Howard University College of Medicine

The Political Factor

Karen Davenport is director of health policy at the Center for American Progress and served on the White House Health Care Reform Task Force in 1993.

Policymakers across the political spectrum have long talked about the need for individuals to be responsible for purchasing health insurance. The Center for American Progress has supported this approach since 2005. For one thing, broadly expanding coverage is a precondition to limiting health care spending overall. (Even a short break in health care coverage can result in an expensive visit to the emergency room for a condition that could have been prevented.)

Mandating insurance may be necessary to get insurers and health care providers on board with reform.

But before making coverage mandatory, we need to reform the health insurance market, strengthen public health insurance programs, and finance premium subsidies for people who can’t afford coverage on their own. Only then would it be possible to carry out a coverage requirement.

While some want to say it is a change from his campaign, President Obama’s recent letter restates his consistent position. As a candidate, he said he would support a coverage requirement for everyone if insurance were affordable and such a requirement was necessary to make health reform possible. Indeed, shared responsibility is probably necessary to make health reform happen at all.

Reform will require players in the system to compromise. Health insurers will have accede to new rules that govern how they do business, like who they cover and what they can charge. Health care providers may need to accept changes in how — and how much — they are paid. These compromises are within reach if the trade-off is that all individuals would be required to hold insurance. But first insurance has to be affordable and accessible.

Defining the ‘Hardship Waiver’

Stuart M. Butler, an adjunct professor in public policy at Georgetown University, is the vice president for domestic policy at the Heritage Foundation.

President Obama has opened the door this week to a serious conversation about “individual responsibility” in health care. As he reminded Hillary Clinton during the primaries, and now reminds Congress, any mandate is unjust if it is unaffordable. So his “hardship waiver,” which would exempt Americans who cannot afford it, is welcome. Still, we need to know what counts as “hardship.”

Why not first try automatically enrolling families in workplace plans or default private plans selected by each state?

But there remain basic questions about a mandate, in addition to the concern about paternalist compulsion. A mandate to buy what? In automobile insurance it’s typically to protect other people against the damage the driver might do to them. The parallel in health is a mandate for me to buy insurance to cover emergency and catastrophic costs that you (taxpayers and insured people) would be stuck with if I can’t pay my hospital bill.

Also, should families be mandated to buy whatever Congress decides, after being pressured from health lobbyists to add everything they can think of into a mandatory “basic” plan? I don’t think so! So let’s discuss what I should be responsible for and who decides that question before embracing any mandate.

And finally, President Obama should propose using a mandate as the last resort, not the first. It turns out that you can get most people to sign up for something by using “automatic enrollment,” where the default is that you are signed up unless you actively decline. Part B of Medicare is voluntary, and yet thanks to automatic enrollment about 96 percent of eligible seniors are enrolled.

President Obama has proposed that workers be automatically enrolled in individual retirement accounts to boost retirement savings. So rather than fight over mandates, why don’t we try automatically enrolling families in plans at their workplace or default private plans selected by each state. Let’s first try individual responsibility as the default option before sending the cops around to enforce a mandate.

Regressive and Unaffordable

Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.

There would be no need for an individual mandate in a single-payer system, since everyone would be covered automatically and it would be paid for through their income and payroll taxes. So asking me, a supporter of a single-payer health system, about mandates is a little like asking someone whether he’s stopped beating his wife.

Only a single-payer system would stop the private insurance industry from holding us hostage.

But even within our current system, I’m troubled by the notion of an individual mandate. I live in Massachusetts, where we have one. It requires people to buy private insurance at whatever price the companies choose to charge. As might be expected, this is a windfall for the insurance industry. Premiums are rising much faster than income, benefit packages are getting skimpier, and deductibles and co-payments are going up.

Many people can’t afford the premiums for the best plans, and so have to choose bare-bones, low-premium plans with high deductibles and co-payments. They are then left with insurance that they might not be able to afford to use, but have to purchase anyway.

A mandate is also extremely regressive. In Massachusetts, mandated insurance and co-payments can amount to nearly a third of income. Income taxes apportion the costs of public services more fairly, and I see no reason not to adopt that approach in paying for health care. To be sure, President Obama has said he would exempt people from the mandate who couldn’t afford to purchase their own health insurance. But aren’t these precisely the people most in need of it? Massachusetts has exempted 62,000 people from the mandate for that reason.

I would hope the President and Congress would come up with something less regressive and truly universal, and stop holding the rest of us hostage to the private insurance industry.

We Need a Market, Not Mandates

Grace-Marie Turner is president of the Galen Institute, a nonprofit research organization focused on free-market ideas in the health sector.

President Obama said during the 2008 campaign, “I believe that the problem is not that people don’t want health care. It is that they can’t afford it.” His reasoning was correct in opposing a mandate that individuals must purchase health insurance. In his letter to Congress this week, he moved toward support for a mandate but again conditioned it on health care being more affordable.

The government-dominated proposals that Obama is endorsing have a poor track record of producing the savings he needs for this plan to work.

But the kind of centralized, government-dominated proposals he endorses elsewhere in his letter have a poor track record of producing the savings he needs for this plan to work. And there is no evidence that Congress will significantly cut the growth of spending in Medicare or Medicaid nor will more spending on information technologies, disease management and prevention produce the needed savings.

As Massachusetts has learned, it is essential to get control of costs first. The state imposed a health insurance mandate on individuals and employers, and cost increases are now the biggest concern. Plans offered through the Massachusetts health insurance exchange have few, if any, of the tools that the private sector is using to engage consumers as partners in managing health costs. The state kept in place the expensive mandates and insurance regulations that had made private coverage so expensive in the first place. Washington appears to be headed down the same path.

The best evidence we have for programs that work is through the incentive-based models that have produced genuine savings for consumers and employers. Deloitte’s Center for Health Solutions found that the cost of consumer-directed health plans increased by only 2.6 percent in 2006 among the 152 major companies it surveyed. This is about a third the rate of increase for traditional plans.

Flexibility, competition and a properly functioning market — which we do not have now — are far preferable to mandates, price controls and more government regulation to reform our health sector.

Universal Coverage Is the Linchpin

Dr. Charles P. Mouton, professor and chairman of the Department of Community and Family Medicine at the Howard University College of Medicine and chief attending physician for the Howard University Hospital Free Clinic. He was recently co-investigator for a study to examine the health of more than 80,000 American women and the prevention of heart disease and other ailments.

In his letter to Congress, President Obama indicated he might be supportive of a requirement that every American have health insurance, with employers sharing some of the cost. Coverage for every American is essential to any health care reform package. No longer can the public afford a system that shifts the burden of care for the uninsured onto those who have health insurance or onto the fragile health care infrastructure.

Every American needs to have a physician who provides them a “medical home.”

As those who have lost their jobs through layoffs, plant closings and corporate failures lose their health coverage, attempts to recover from the economic downturn will likely be stopped in its tracks without health reform. The Obama administration understands this. Universal coverage is the necessary linchpin to stabilizing the health care system.

Some opponents think that merely encouraging health insurance companies to expand their enrollment will be enough to correct the problem of the uninsured. They seem to be prescribing a new whip for a dead horse. As health insurers continue to shift costs, add more pre-existing conditions that would not covered and deny coverage, the number of uninsured Americans will increase.

Perhaps equally important to providing the fundamental change to the system, universal coverage will provide the opportunity for every American to have a physician who provides them a “medical home.” No longer will millions of families seek routine medical care through hospital emergency rooms. Instead, they will have a family physician focused on coordinating care for their illnesses and assuring that they receive care that promotes health and wellness. Only through coverage for everyone will we begin to raise the health of Americans from 37th among industrialize countries to the top where it belongs.

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