Public discourse about health insurance has become so politicized that few address policy with dispassion. When policymakers assess every law through the prism of Obamacare, championing only those that protect the legislation, the people lose. Obamacare or the Affordable Care Act (ACA) contains substantial design inequities that should be corrected. For example, the individual heath insurance mandate (unpopular with two-thirds of the public) disproportionately hurts vulnerable segments of the population. This is why Congress eliminated the penalty associated with the mandate last December.
Enacting an individual mandate penalty would hurt Vermont’s poor
The individual mandate was designed to “stabilize” the insurance exchange in politically correct terms, so that insurers could maintain a wide pool of healthier, low-risk, high-premium payers to subsidize the medical costs incurred by the chronically ill. Referring to this argument, Vermont lawmakers maintained that imposing an individual mandate is integral to paying for those with pre-existing conditions. This is not accurate. In truth, the mandate serves as a stick, preventing Americans from escaping the state’s failing insurance exchange in search of carrots elsewhere.
Moreover, ACA subsidy provisions (for which 85 percent of persons on the exchange qualify) finance the insurance expenses of low-income Americans and those with pre-existing conditions, whereas the now-eliminated federal individual mandate concentrated these costs on a niche demographic. Low-to-middle middle income individuals without employer-based health insurance (such as small business owners and those juggling multiple part-time jobs), and that do not qualify for religious or hardship exemptions, disproportionately paid the price.
For example, a young couple making $65,000 per year would be ineligible, and could be fined up to $1,390 for saving money and remaining uninsured. IRS data shows that 78.5 percent of Americans that paid mandate penalties for the 2015 tax year earned between $10,000 and $50,000 annually. Therefore, resurrecting such a dysfunctional and coercive mandate in Vermont would set up an anti-competitive and inequitable system of obligatory cross-subsidization, which attempts to pay for the expensive, long-term medical care of persons with chronic conditions by taxing those that cannot afford health insurance.
When premiums and out-of-pocket costs (i.e. deductibles, copayments, and coinsurance) vastly exceed the mandate penalty, many are compelled to forgo coverage. Census data shows that Americans aged 25-34 years form the largest uninsured group at 25 percent (followed by 20 percent of the 35-44 age cohort). The 2014 Vermont Household Health Insurance Survey shows that Vermonters aged 25-34 years formed the largest uninsured group at 11.0 percent (5.1 percent between 35-44 years and 4.6 percent of the 18-24 age cohort also did not have health insurance). Some could argue that younger Americans do not purchase insurance because they are healthy, but a 2016 Harris Poll indicates that increasingly they cannot afford it. An individual mandate thus serves as a health tax by compelling younger, healthier citizens to purchase unaffordable insurance.
Politicizing Health Insurance
Pro-mandate advocates in contend that enacting an individual mandate will keep the number of uninsured low, citing a Congressional Budget Office report that thirteen million will “lose” insurance by 2027 as a result of the federal mandate repeal. First, recent studies demonstrate that the federal individual mandate had no discernible impact on the proportion of uninsured Americans.
Second, the mandate would ravage the American contract law of mutual assent. Vermonters should have the right to make their own life decisions. The Individual Mandate Working Group’s Draft Report states the need to “leverage Vermont’s socially responsible culture,” that is, the report stresses the need for everyone to contribute. Everyone, however, does not contribute equally. Enacting an individual mandate would perpetrate an injustice by demanding more from some (with limited economic means) than others.
Preventing healthy, wealthy persons that deliberately shun coverage from “free riding” the system when they fall ill represents another inaccurate claim advanced by mandate supporters. In reality, free riding accounts for a mere 0.67 percent of national health expenditures. Moreover, many pay out-of-pocket for treatment when needed and hence, staying uninsured does not amount to gaming the American healthcare system.
The mandate is bad healthcare policy
Cost-effective alternatives to an individual mandate exist. (A) Provide more choice in the form of slimmed down plans with low premiums for catastrophic coverage, which would incentivize the young and healthy to remain in the insurance pool. (B) Create separate and efficient high-risk pools through which greater subsidies could be focused toward tailored medical care (e.g. preventive services) for low income Americans suffering from major chronic illnesses. Maine operates a successful invisible high-risk pool, launched in 2011, which should serve as a model for tending to society’s most vulnerable without arbitrarily taxing some and depriving all of the freedom to choose.
To quote then Democratic presidential candidate Barack Obama’s 2008 critique of his opponent Hillary Clinton’s plan to force all Americans to purchase insurance or pay a noncompliance penalty, “If a mandate was the solution, we could solve homelessness by mandating everybody buy a house.” Obama added.,” Punishing families who can’t afford health care to begin with just doesn’t make sense.”
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As a nurse working in healthcare for almost 30 years and the daughter of a surgeon who practiced in NH for 50 years, I have what must be a unique perception of one reason why American healthcare is so expensive. Back when y father started practicing, the majority of employees in the hospitals were doctors, nurses and staff who in some form actually interacted with patients. In other words, the clinical staff far outnumbered the administrative.. Today, the ratio is exactly the opposite. With the advent of computerization, the need for administrative people should have not grown so disproportionately. The CEO of my small hospital makes $1,000,000 per year with no medical background. The vice presidents are proportionately rewarded. This small cadre of administration has salary requirements that exceed those of the nursing staff in its entirety, yet their actual contribution to the care of patients is nil. Contrast that with the salary of CNA’s and RN’s who start at $10.50 and $22 per hour. If the boards of these facilities were to decrease the salaries of their top administrators by half, the people who actually do the work could have raises which would attract more staff in times of shortages and still decrease the operative costs by a couple of million or so per year. Believe me, these people do not make decisions that benefit the patients or hospitals in flawless form that merits superinflated salaries. I have seen expensive computer programs bought and discarded within months of purchase, building remodeling and expansions that were outdated before they were finished. If the American medical providers and consumers would stop relinquishing their control to these money hungry administrators , who with their inflated salaries clearly have lost touch with the real costs and the real valuable assets of health care, then perhaps the system cam be saved.