So TomP went and said the secret word, the word that is guaranteed to set poor old eugene off - "mandates." I have spent the last two years fighting mandated insurance, especially here in California. Much of that time I was uninsured. I've written several diaries about the flaws of mandates and I felt like it was time to collect them here.
The basic gist is that mandated insurance is a tax on people for being poor or lower-middle class. It will do NOTHING to solve the real problem or the real need, which is guaranteed access to affordable care. The subsidies will prove inadequate as has been shown in Massachusetts. The mandate will be widely evaded, as shown in Massachusetts. The public option will become the dumping ground for the for-profit insurers who want to get rid of the sick. And that will in turn drive up the costs of the public option and cause a political crisis that will give ammunition to enemies of government action on health care.
Finally, mandates will jeopardize our political gains. If you think that during a recession and a time of mass unemployment that handing Americans a bill for insurance that comes with high premiums, high deductibles and crappy coverage that voters will do anything but give us a big fat electoral raspberry, you are insane.
Update [2008-11-12 16:53:4 by eugene]: - see this diary by epic that provides a damning account of just how badly the Massachusetts mandate plan has failed the people who need health care reform the most. What more evidence do we need to know this concept is a turkey?
In the last two years there have been a number of excellent diaries from well-respected Kossacks pointing out why individual mandates are flawed. There's bonddad's "Why Market-Based Health Insurance Doesn't Work" (he's written many other diaries this year repeating this point in differents ways). nyceve - perhaps the best blogger in the country writing on health care - offered two diaries explaining the flaws of the mandated health insurance approach, including This better not be what they mean by healthcare reform and Are we being set up for junk healthcare reform - reform in name only?
The point these writers have made is that health insurers as a matter of basic business practice must deny care and claims to maintain profitability - they have to take in more money than they pay out. (bonddad) They also point out that this means health insurers routinely deny care - nyceve has noted her wait time for an MRI, and in Wednesday's diary explained the new trend of doctors refusing to accept health insurance at all for fear of no reimbursement. We also are aware of Markos and Elisa's problems with their health insurance - Markos had to wait weeks to get a necessary CT scan; his wife was told that BCBS wouldn't pay for her epidural.
What all of this demonstrates is that health insurance is NOT health care. Health insurance is no guarantee of health care. Health insurance is nothing more than you paying some company. That's it. Whether you actually get health care is another matter entirely.
Mandate supporters ignore this They suggest that our health care crisis can be solved by forcing people to buy insurance. Nowhere do they address bonddad's point that insurers deny care as a basic business model. Nowhere do they address nyceve's point (and Michael Moore's point, in SiCKO) that the real issue in America is that insurance is failing to meet our health care needs. Their failure to discuss this, and their desire to frame these points of view right out of the conversation, is deeply troubling.
Quoting from a December 2007 Paul Krugman column:
First is the claim that a mandate is unenforceable. Mr. Obama’s advisers have seized on the widely cited statistic that 15 percent of drivers are uninsured, even though insurance is legally required.
But this statistic is known to be seriously overstated — and some states have managed to get the number of uninsured drivers down to as little as 2 percent. Besides, while the enforcement of car insurance mandates isn’t perfect, it does greatly increase the number of insured drivers.
Here in California the estimates run from 25% to as high as 45% depending on the location.
Further, car insurance and health insurance are completely different. I've been a licensed driver for 12 years and have been insured that entire time. In those 12 years I have only ONCE ever had to make a car insurance claim, when some idiot ran a red light and hit me in the middle of an intersection (I was OK).
With health insurance, however, I'd use it at least once every six months, and many Americans would use their insurance once a MONTH - as opposed to once in 12 years for auto insurance. That's a totally different ballgame.
Anyway, why talk about car insurance rather than looking at direct evidence on how health care mandates perform? Other countries — notably Switzerland and the Netherlands — already have such mandates. And guess what? They work.
Krugman should know better. Switzerland and the Netherlands are completely different cases. First, neither have for-profit insurers. Second, there is much less income inequality and a higher average income in both countries, which routinely top global rankings for standard of living. This means that citizens in these countries have more disposable wealth which which they can buy insurance. Third, their health insurance markets are VERY strongly regulated, much more strongly than here in the US, and much more strongly than in any of the individual mandate plans being offered.
Krugman is well aware of the fundamental problems of rising inequality in America and the role of corporations in promoting that. He is taking a flight from reality when he says that the Swiss and Dutch examples are relevant to America in the '00s.
The second false claim is that people won’t be able to afford the insurance they’re required to have — a claim usually supported with data about how expensive insurance is. But all the Democratic plans include subsidies to lower-income families to help them pay for insurance, plus a promise to increase the subsidies if they prove insufficient.
There are so many problems with this that I literally do not know where to begin. First, he is dismissing the multiple concerns about the cost of health insurance with little more than a wave of the hand. Second, he zeroes in on "lower-income families" - but what about middle income families?? The very families that Krugman has spent 7 years explaining how they're facing crisis? By Krugman's own implicit admission here, mandates do nothing to help them afford what could be a crushing financial blow.
Further, he should know better than a "promise to increase the subsidies" is no substitute for actual provision and detailed planning for this. Such promises are pie-in-the-sky no matter who is offering them.
Finally, there is an economic argument against these subsidies - they're wasteful and ineffecient. Wouldn't those subsidies be better spent by government paying for low-income folks' health care itself, instead of giving subsidies to health insurers in the hopes that those insurers will, against all evidence, actually spend it on patient care?
By the way, the limitations of the Massachusetts plan to cover all the state’s uninsured — which is actually doing much better than most reports suggest — come not from the difficulty of enforcing mandates, but from the fact that the state hasn’t yet allocated enough money for subsidies.
Krugman is flat wrong on this and I have to believe it is a willful error. Currently 230,000 Massachusetts residents remain uninsured even though the mandate has gone into effect - which is more than half the original number of 400,000 uninsured prior to the mandate. As CBS News explained:
It's a tough sell because one of the cheapest family plans available, unsubsidized, with drug coverage, is $662 a month. When [CBS reporter Wyatt] Andrews talked to contractor Roger Thompson, there was no way.
"I have no choice. It would be like another mortgage payment for my family and I can't afford that," he said.
Krugman dismisses this man's concerns and goes on to claim that the problem is merely a lack of money. Well, why is that? Krugman should know better than anyone - government is being starved of resources by conservative policies. Those policies are undermining the social safety net and contributing to what Krugman himself called "the Great Unraveling."
Further, who is it in MA that hasn't appropriated the money? Democrats. Romney may have signed the bill, but the MA mandates were a Democratic plan. Here in 2007 MA has a Democratic governor and massive Democratic legislative majorities. If these Democrats haven't provided the proper funding, then what is to guarantee that a Democratic president and a Democratic Congress will?
But don't just listen to me on this. The Rockridge Institute in October launched Don't Think of a Sick Child: The Logic of the Health Care Debate. In it, the Rockridge Institute argues that the health care debate is a moral debate above all else. If we are to achieve progressive ends - ensuring every Californian has access to health care - we must employ progressive means.
Their analysis turns on an assessment of the "neoliberal" argument that has seduced many Democrats and even some progressives, that the market can be harnessed for progressive health care outcomes. As the Rockridge Institute explains, it simply does not work that way:
Neoliberal thought accepts a conservative version of market principles that guarantees profits to insurance and drug companies. Often, this is done in the name of political pragmatism, as a way to mute expected conservative opposition. This creates an inherent tension between the moral mission of government to provide for the protection - in this case the health security - of all of its people and the profit-maximizing insurance marketplace, which works only by denying care....
Progressives who adopt a neoliberal mode of thought, or align themselves with others who do, could inadvertently undermine progressive values and policy goals, surrendering them in advance - anticipating conservative resistance even before negotiations occur - and before the public has a chance to even consider such values.
What Lakoff and his fellows are explaining is the same phenomenon that mandate-supporting Democrats have fallen victim to. They argue that neoliberal methods can achieve progressive goals - but in fact, they cannot. And as you argue in favor of neoliberal methods, you start making neoliberal arguments, deeply anti-progressive arguments such as the BS that Krugman once spouted about how we who can't afford insurance but who need care are "gaming the system."
A brief summary of the key arguments against mandates:
Care, not coverage
The error folks make is to assume the problem is coverage. It is NOT. The problem with health care in America is that Americans lack guaranteed access to affordable care. Notice there was nothing anywhere in that bolded phrase that mentioned "coverage." That is because we must put the emphasis where it exists - guaranteed access (which covers the universality issue many rightly point to) and affordable care which mandate defenders unfortunately, rarely even mention.
Health insurance does nothing, nothing whatsoever, to produce affordable care. In a system based on insurance you must pay a premium before you can see a doctor - if you haven't paid up you're SOL. Since most insurers are for-profit companies, they have as a core business model the desire to make money. Cost containment is going to be extremely difficult in this system without telling people who need care that in fact they cannot get it.
Affordability
The defenders of mandates suggest that with everyone in the system, paying premiums, the cost to patients will fall. But as that recommended diary showed this is just not backed up by evidence. Remember folks, we live in a reality-based community, and evidence trumps your assumptions.
In Massachusetts, the Connector - the state agency in charge of helping people find affordable care - had to rebid the lowest minimum health insurance plan several times in early 2007 to produce an affordable plan. Most of those affordable plans came with high copays and deductibles. At the end of 2007 the insurers informed the Connector that they were unable to limit premium increase percentages to under double-digits - meaning Massachusetts residents faced a minimum of 10% increases.
It is hard to get by in today's economy. People are having a difficult time paying rent, paying bills, buying food, on their meager salaries. So why would we be suggesting that all Americans be saddled with another bill, one they will have a difficult time paying? Don't we understand that the LAST thing American families need is a whopping bill they must pay under penalty of law? Do we really believe people should be subject to fines simply because they are poor?
The subsidies won't work
To that charge many defenders of mandate plans say "but there are subsidies for those who can't afford a premium!" Yes, there are. And in Massachusetts they have proved woefully inadequate. Currently the Massachusetts subsidies are running a $145 million deficit - meaning there is not enough money available to pay for the subsidies of everyone who is entitled to it. This is in a Democratic state, mind you - a state with a Democratic governor and massive Democratic legislative majorities.
Why are the subsidies inadequate? Because more people needed to use them than were expected. The combination of a stagnant economy and high premiums meant that the public demand for subsidies rose. It is likely still rising. If a nationwide mandate plan were adopted, there would have to be many billions of dollars set aside for such subsidies.
And is that a wise and efficient use of taxpayer money? Why should we be subsidizing health insurers? Wouldn't it be simpler, cheaper, and more effective to use that money to pay for care directly? Subsidies are therefore a massive waste of money - one that cannot even be counted on by the people who would need it.
Insurance fails to provide universality
Most progressives claim that universality is of central importance. Here I agree. So why would we be backing a plan that has failed to provide universality? In Massachusetts, only 7% of uninsured residents had purchased insurance, despite possible financial penalties.
7%. That's an unusually bad number. If universality is the goal, why would we embrace mandated health insurance to provide it, when it has so obviously failed to do so? Why not guarantee that every American, as a condition of being alive, has access to health care whenever they need it, and that they don't have to pay for it at the point of delivery? Instead, taxation pays the bills. Why aren't Democrats backing that kind of plan?
Insurance often fails to provide actual care
Even more damning is the fact that having health insurance is by no means any guarantee whatsoever that the policyholder will actually get health care. We all remember the horrifying story of Nataline Sarkisyan, who died because CIGNA would not authorize a life-saving procedure. She was insured! So was Nick Colombo. The California Nurses Association has collected dozens of similar stories at their website, Guaranteed Healthcare.
This would be an especially serious problem in a mandated insurance environment. Insurers would not be able to refuse to write a policy to someone - this is considered a good thing, a positive aspect of mandates. But those insurers WILL find other ways to make their profit, by denying care and claims to the sick. If they can't refuse a policy, they can, they will, and they HAVE refused health care. And they have done so in the face of state law - California fined one insurer $3.5 million and is looking at fining another for "hundreds of thousands" of claims processing "problems."
Insurance isn't going to provide most people with access to the health care they need when they need it. Which makes you wonder why we would even want to mandate this at all.
The Dumping Ground
Some point to the public option, the government provided insurance, as a reason to back mandates. I say they will fail. Here's why.
What do you think for-profit insurers will do under a mandate? Try to maximize their profits. How? By offering low-premium and low-benefit plans to healthy people, and by cutting costs. How do you do that? You kick the sick off your rolls.
Sure, there will be rules against this, but that can be avoided. You take your time reimbursing claims. You drag out the approval process for months or years. You use every bureaucratic tool at your disposal to drive the sick onto the public rolls.
What happens then? The cost of administering the public option rise. Three outcomes then develop:
- Premiums for the public option must rise to pay the higher cost of care
- Benefits must be cut
- Taxpayer bailout
In ANY of those cases the right will use it to argue that government provision of health care is flawed and inefficient, that it costs more than it brings in. So the public option is likely to either cost more, provide less, or be scaled back. Great.
Employer-provided health insurance is on the way out
Mandated insurance plans assume a sort of perpetual 1990s - where most Americans have decent insurance through their workplace, and we just have to figure out something for the rest.
But for several years now we have been witnessing the collapse of employer-based health insurance. As the costs have skyrocketed - 78% since 2001 - employers have been pushing the cost burden onto employees. And more and more employers simply no longer offer health benefits at all.
This is going to accelerate as the recession deepens. Unemployed workers won't have health benefits, and those companies that remain in business will be trying frantically to cut their health care costs.
That means we are going to need to provide a different solution. One that provides the guaranteed access to affordable care that all Americans deserve. Single-payer, anyone?!
Mandates are a Nixonian Plot
I'm serious. From a 2007 op-ed by two Harvard physicians:
IN 1971, President Nixon sought to forestall single-payer national health insurance by proposing an alternative. He wanted to combine a mandate, which would require that employers cover their workers, with a Medicaid-like program for poor families, which all Americans would be able to join by paying sliding-scale premiums based on their income.
Note that in Massachusetts, the main promoter of mandates was...Mitt Romney. Who used them to forestall a grassroots push for single-payer.
Here in California the main promoter of mandates was...Arnold Schwarzenegger. Who wanted to use them to forestall a grassroots push for single-payer.
Nice company we're keeping.
Conclusion
This isn't the full list of arguments against mandated health insurance, but it is the key points delivered concisely.
This is going to be the fight of our lives. Health care is one of the most important reforms facing our society. Mandated insurance, however, will not be among the solutions. It's my hope that progressives will recognize that and stand with uninsured Americans like myself, people whose real problem is a lack of affordability. With everyone on our side, we can accomplish wonders. Let's hope they comes to their senses.