Health Care Reform: Forced Insurance – Promises Reduced Income

According to recent article from the New York Times, the economic impact of broadening health insurance coverage is likely to make “many people worse off.”

For example, everyone will be required to buy health insurance through their employers or ‘exchanges.’ If a person gets coverage from their employer under the new health care bill, the costs of coverage will likely “result in lower wages.” Essentially, if they purchase it from the exchanges, people will “be compelled to spend lots of money on something they previously did not want, at least not at prevailing prices.” Who are these uninsured people?

First, millions of 18-30 year-old individuals who are healthy and for the most part do not require the cost of health insurance more than what they pay out-of-pocket for annual check ups. Second, millions of illegal immigrants who although they abuse our emergency room medical practices, would be better handled with stronger immigration policies then offering them health insurance. Third, millions of Americans who do not know they qualify for Medicaid or Medicare.

Giving these groups of people coverage will not save us the money it will cost to provide them health insurance, it will just provide an uncontrollable shock to a system already overloaded with patients, and understaffed with doctors and nurses.

Proponents of a broad health insurance mandate argue that bringing uninsured young, healthy people into the insurance might lower average premiums by spreading risk across low-cost groups. “Yet Massachusetts has had a health insurance mandate for several years and this cost-saving mechanism does not appear to be kicking in.”

If we do give these groups health insurance, “estimates of this burden vary, but for a family of four it could range up to $14,000 a year over the next decade, according to the Congressional Budget Office.” What is wrong with Americans taking the risk of going without health insurance? Many of us choose to take the bus or metro instead of driving. Some of us eat red meat and others are vegetarians. Everything in life has risk.

What this mandate does is paradoxical: it starts “with anecdotes about the underprivileged that are uninsured, then turn around and propose something that would hurt at least some members of that group”

Some of the bills attempt to alleviate “the burdens of the insurance mandate, through varying levels of subsidy.” The current Senate bill gives subsidies to families with incomes as high as $88,000 a year. How long will it be before just about everyone wants further assistance, and this new form of entitlement spending spins out of control? Out of control spending already takes place in Medicare, which is set to go bankrupt in 2017.  

There is also a problem with providing subsidies to income groups earnings begin to vary. If a family begins to earn more, then their subsidy would probably decrease, eventually falling to zero. This would create a disincentive to earn more, and families would choose to continue this trend by bordering the income line to keep the subsidies

Another problem identified by health insurance mandates is the “mandate creep,” which is already prevalent at the state level. Essentially, groups at the state level lobby for various types of coverage — whether for acupuncture, alcoholism and fertility treatments, for example, or for chiropractor services or marriage counseling.

As a result, today “there are now about 1,500 insurance mandates among the various states, and hundreds of others are under consideration.” What initially starts out as providing “essential benefits” becomes a “big incentive to push for more and more mandates, while most other people are unaware of the specific issues and don’t become involved.” One must wonder if when such demand and lobbying comes from the public if Congress will look to its own understaffed agencies such as HHS and FDA to provide such services, or if industry will still be around to pay for the bill.

America cannot be effectively compared to countries like Switzerland and the Netherlands because “health care cost inflation is under control, and both of those countries fare better at technocracy than the larger, less tightly ordered United States.” These countries are also able to handle health care better because there is not such a large gap between incomes that we see in here.

In the end, because America did not put cost first—we just continued to take up the debt—we are now seeing a health care overhaul that increases “fiscal pressures on the system, in the hope that someday, somehow, it will all work out.” Such irresponsible behavior is not what Americans need, especially not those who are disadvantaged and in need. Health care reform should focus on fixing manageable problems like fraud and waste in Medicare, more research into drugs and devices to prevent life threatening diseases, and improving the management of health care providers by offering more training in academic medical centers and grants.

Insuring more people or forcing more people to get health insurance will not make America healthier. Better doctors, medicine, treatments and research will.