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Jul
13

Universal coverage is bad – Part Five

Today we’ll look at two closely related concerns about universal coverage – the claim that it will give government too much power and is a devastating blow to personal liberty.
Unlike most of the other arguments against UC, these are more philosophical than factual. And reasonable people can disagree. And do.


Some critics of UC see the mechanisms of enforcing a requirement that each individual have health insurance as ceding too much authority to government. The argument typically follows the following path –
“we can’t trust the government to (pick one or more)
issue passports/defend our borders/collect taxes/educate children/test drugs so how can we trust them with health insurance?”
Here’s how the National Review puts it:
“Mandatory health insurance, meanwhile, would entail a governmental definition of a minimum package of benefits that insurance has to cover. Over time, that minimum package would grow more and more expensive as provider groups lobbied the government to include their services in the mandate.”
I suppose that’s possible; it is also possible that health care budget caps (like those that exist in many other countries) would have the opposite effect – a reduction in the number of unnecessary procedures as they are tested for efficacy and fail to meet minimum standards.
Perhaps UC critics are concerned that government would be in a position to determine what should and should not be paid for. But that’s the situation today. Most private insurers base their coverage decisions on what CMS approves and does not. Take ambulatory surgery for lumbar laminectomies. Although it is cheaper to do (some of) these in an outpatient setting, since Medicare does not authorize payment in that setting, many private insurers will only reimburse for inpatient procedures. CMS is viewed as the de facto authority by private payers; procedures that are considered experimental or unproven by CMS are rarely covered by private insurers.
Which brings up another issue – is the current level of governmental influence on health care coverage appropriate? Here’s what I’ve learned during 25 years in the industry. Few insurers have the database, financial or intellectual resources, or inclination to evaluate each and every medical procedure, drug, technology, or treatment to determine if it should be covered for a specific patient sub-population. Therefore, health plans rely on the Feds to tell them what should, and should not, be ‘reimbursable”. Insurers could do this on their own, but they choose not to.
Would mandated universal coverage be an affront to personal liberty? That’s completely dependent on how you view your ‘liberty”. Some consider it liberating to be free from worry about questions such as
– how will I pay my health care bills?
– will I be able to get coverage for a pre-existing condition?
– how can I leave my dead-end job given my family’s need for health insurance?
– what will I do if my application for individual insurance is rejected?
how can my business compete with others if I pay for health insurance for my employees and the competitors don’t?
Others believe that paying for health care is an individual responsibility, and may find it liberating to be free from any requirement to have coverage (although how liberated they will feel if they get skin cancer or fall off their bike and get a traumatic brain injury may be subject to debate).
And right now, while individuals can decide to forego coverage, providers have no such freedom when it comes to treating patients without insurance.
So individuals who could afford and obtain insurance coverage yet choose to go without insurance are really free-loaders, taking advantage of providers and people with insurance.
And some may feel that isn’t right.


3 thoughts on “Universal coverage is bad – Part Five”

  1. Joe – It’s a little difficult to consider an insurance mandate separate from other reforms. The really big questions are how the insurance will be priced and what happens when a person cannot afford insurance.
    If the existing insurance system remains in place, maybe you’ll pick up a few million people that were “free-loading.” But the main reason people don’t buy insurance is because they can’t afford it. Family coverage for people with known health conditions can easily cost over $50,000 per year.
    It would be much easier to achieve universal coverage if everyone was automatically enrolled in a single government-run insurance plan funded by a variety of sources – employer taxes, payroll taxes, and reversal of some Bush tax breaks for the very wealthy (>$250K family income).

  2. Chris,
    I’m pretty sure Joe is an advocate of community rating, and probably also of some form of ban on refusing insurance on the basis of prior conditions.
    As for it being “much easier” to achieve universal coverage with a single government-run program instead of multiple private insurers, you might want to consider the case of Germany. The added complexity there doesn’t prevent them from having total health care costs in line with single-payer nations like Canada.

  3. Joe,
    I think you give too much credit to the libertarian assertion that universal healthcare would lead to an upward spiral of costs due to lobbying on the part of providers. If the Cato types can point to a single universal coverage nation that has been unable to control costs better than the US, they might have a point. But they can’t, and don’t.

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Joe Paduda is the principal of Health Strategy Associates

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