Mandatory Health Insurance Myth Buster

It is now January 5th, and time to climb back into the saddle and start looking once again for health plan innovations.

One of the so called innovations that we are hearing about from some of the leading presidential candidates is a federal mandate which would require everyone not in Medicaid or another government program to buy health insurance. In an op-ed piece in yesterday’s Wall Street Journal, Betsy McCaughey, a former lieutenant governor of New York, and an adjunct senior fellow at the Hudson Institute, writes that many of the augments used to promote mandatory coverage are based on “myths.”

She then goes on to systematically debunk, as myths, three arguments she says are used often by mandate proponents:

  1. It’s fair to make everyone pay the same price for health insurance.
  2. Lack of insurance forces people into the emergency room for routine health care.
  3. A system that leaves 47 million Americans without health care is a moral disgrace.

In the process, she argue that mandating the 56% of the uninsured who are adults aged 18-34 to buy insurance at prices that are geared not to reflect their risk, but to help subsidize older, more at risk, buyers is grossly unfair. (A point that I note has distinguished Senator Obama’s plans from Senator Clinton’s and may, in some small way, play a role in his popularity with younger voters.)

As for emergency room use, she says that federal data (the Medical Expenditure Panel Survey provided by the Agency for Healthcare Research and Quality) show that the elderly are most inclined to go to the emergency room, though they are universally covered by Medicare. Other repeat users, she points out citing an Institute of Medicine study, are the “frequent flyers” who are in the ER repeatedly because of mental illness or substance abuse. Enacting a mandate isn’t going to eradicate the behavioral problems that land them in the ER.

Finally, the moral issue of having 47 million uninsured in this country. That does sound awful, but here are some fact that Ms. McCaughey included in her piece that changes the picture quite a bit.

“According to the Census Bureau, of the 47 million uninsured, nearly 10 million have household incomes of at least $75,000. They probably can afford coverage but have chosen not to buy it. Another 14 million of the uninsured are already eligible for government programs such as Medicaid (for low income adults) and the State Children’s Health Insurance Program (for children) and simply need to sign up.”

That leaves about 23.7 million people — some citizens, others newcomers — who cannot afford coverage.

Now that is seems like half of the problem has been solved — or is really not a problem — does a mandate still seem like such a good idea? Or, does it make more sense to go after the problem of how to provide coverage for uninsured immigrants and those who, for what ever reason, are falling though the safety net of existing government programs?

Thanks to insightful pieces like the one written by Ms. McCaughey, we can take some of the emotionalism out of the debate, look at the facts, and then develop innovative solutions based on reality, not myths.


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