One of the biggest complaints about the new health insurance legislation—indeed, a main source of lawsuits against it—is the requirement that everyone obtain coverage or face penalties. I support the requirement and here’s why.
Earlier this year I was bitten by a copperhead in our backyard, a not-uncommon occurrence in North Carolina as we lead the nation in copperhead bites. It was a nasty, painful experience, but most of all it was expensive. I spent 23 hours in the Duke Emergency Room and came out with a bill of $65,000, before insurance kicked in. Yes, you read that right.
The main part of the bill was the charge for anti-venin: each dose cost $30,000, and I received two.
When I asked a pharmacist familiar with Duke’s operations why the cost was so high, she became defensive. She said that Duke probably paid about $10,000 for each of the doses, but had to pass along other costs to me and to my insurance company. One of the biggest of these, of course, is to cover those people who also show up at Duke this year with a copperhead bite but who, unfortunately, have no health insurance. In these cases Duke will absorb the costs because, frankly, who among us can pay $65,000 for an unexpected medical bill?
I realize that American health care is expensive for lots of reasons, and the new legislation doesn’t address all of the problems. We have a ways to go. But as long as fellow citizens remain uninsured—often because they can’t afford the outrageous premiums charged for individual plans—the rest of us will pay their bills.
I don’t mind paying taxes for the common good. But I do mind paying a disproportionate amount for other people’s health care. It’s time to make everybody sign up, to create affordable plans, and to put us all on a more equal footing.
Bring on the new legislation and follow up with more.
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This viewpoint is correct in that people without health insurance coverage become an indirect tax on those that do have coverage and from that perspective getting everyone in the "game" is a positive thing. The challenge comes along with the additional reform provisions that impact the pay or play mandate. The new law requires that employers and individuals create health plans and participate by 2014. Unfortunately the penalties associated with non-compliance are not equally distributed. Employers have very material penalties to face, while individuals face relatively small downside risk. For this reason many individuals will simply elect not to get in the game and thus pay their penalty and wait until they actually need the coverage. At that point they will be able to purchase coverage, with no adverse risk charges and with no pre-existing condition penalties. So we end up right back in the same situation we have currently, where the folks that are participating in the system in a responsible manner end up getting an indirect tax from those that elect to game the system by jumping in and out only when they are about to use the coverage. If the only people that bought homeowners insurance were the people that already had a house on fire, the system would not work. Health insurance is a very similar concept for risk sharing. If you don't believe it, take a look at the stats for people getting in and out of the "reformed" system in Massachusetts. Then take a look at the rising costs of health care there.
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