Bill Frist: Mandate Health Insurance

health-insurance-wallet-stethoscopeFormer Senate Majority Leader Bill Frist, a Tennessee Republican and world renowned heart surgeon, argues that the federal government must require all Americans to purchase health insurance.

In our reimbursement-driven, public-private health sector (which delivers the most robust health services on the globe), the only way affordable access can be achieved is for every citizen to have some type of insurance.

[…]

First, it would achieve fairness. No family in America should fear bankruptcy because of an accident, a child’s cancer, or a heart attack. That is the purpose of insurance. An individual mandate is the only way to achieve affordable insurance coverage for every American in a pluralistic, public-private sector.

Second, it would eliminate wasteful cost-shifting. Though many uninsured people do eventually get care in emergency rooms, the $30 billion to $50 billion in bills for “uncompensated care” or “bad debt” they generate are inefficiently shifted to the privately insured, wasting scarce health dollars. These economic distortions are behind the dollar aspirin tablet and the $10 Band-Aid you discover on your hospital bill. No one knows the real price of anything. Such lack of transparency destroys any hope for true market forces, like prudent purchasing by the consumer, which would normally hold the “health spending curve” in check.

And few today who remain “voluntarily uninsured” fully appreciate the risks they would face in the case of a catastrophic event.

Third, it would reduce adverse selection. When healthier people opt not to carry insurance, only those with poorer health, and thus higher costs, remain in. This leads insurance prices to spiral up. And it further impedes markets’ ability to mitigate risks and prevent personal economic catastrophe. The “free-riders” who do not purchase insurance and the “voluntarily uninsured” who depend on emergency room care paid by others would then pay their fair share for services received.

The second of these is puzzling. Most of us have health insurance and yet, as Frist says, “No one knows the real price of anything.” Why would adding more people to the same system change that?

The rest of this is likely true. But it elides one small fact: Requiring people to purchase health insurance is essentially a giant tax that takes away people’s ability to spend their money as they see fit. (Let’s leave aside, for now, the issues of freedom an whether the federal government has the authority to do this.)

I have had health insurance most of my life. For three plus years in my late 20s when I was in graduate school, though, I chose to forgo health insurance. I was bringing in a few hundred bucks a month through a graduate teaching assistantship and the GI Bill and needed to pay for rent, utilities, car insurance, books, food, and incidentals. Spending $250 or so a month — more than a quarter of my income — on something I was decidedly unlikely to need would have required me to either take a second job or go into debt.

Frist and others who want to mandate coverage seem to think that it’s just greedy, selfish, or foolish people making the decision not to buy insurance so that they can spend it on luxury items.  Most, I would wager, “decide” not to buy insurance for the same reasons that I did:   Either they simply can’t afford it or they’re very young and healthy.

FILED UNDER: Government, US Politics, , , , , , ,
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. odograph says:

    Who did you plan on hitting up, James, if you encountered “unexpected” medical costs?

    On Frist’s piece, this part jumps out for me:

    No family in America should fear bankruptcy because of an accident, a child’s cancer, or a heart attack. That is the purpose of insurance.

    I think that implies a no-maximum or high-maximum benefit plan. Those are not cheap.

  2. Dave Schuler says:

    The second of these is puzzling. Most of us have health insurance and yet, as Frist says, “No one knows the real price of anything.” Why would adding more people to the same system change that?

    I agree that price discovery is one of the major issues in healthcare and Dr. Frist seems to believe that the reason for peculiar pricing is cost-shifting (evidence?).

    I think that what the op-ed is that even if they’ve been U. S. senators heart surgeons have no particular knowledge or expertise in healthcare economics. Why would they need it?

  3. James Joyner says:

    Who did you plan on hitting up, James, if you encountered “unexpected” medical costs?

    I’d presumably have gone into debt. Or possibly bankruptcy. But it’s simply absurd for a healthy 20-something with no dependents to spend a quarter to a third of their income insuring against extremely unlikely risks.

    I had auto coverage because an auto accident was a far more likely eventuality and the cost of insurance was far less.

  4. odograph says:

    You know, when I was in the shower I remembered another guy I met. He was brought to church, in his wheelchair, by his mom. He was about the same age you were, on a bike, when he was mowed down by an uninsured drunk driver. Broke his back. I think he was getting movement back, but needed the stainless steel frame of immobility while he healed.

    I’d presumably have gone into debt. Or possibly bankruptcy. But it’s simply absurd for a healthy 20-something with no dependents to spend a quarter to a third of their income insuring against extremely unlikely risks.

    So … we can’t have National Health, because that would be socialist. And we can’t have mandatory health insurance, because that would be absurd.

    I guess drunk drivers will still be able to bankrupt kids and possibly their parents, right?

  5. Zelsdorf Ragshaft III says:

    Being forced to indemnify against future possibilities flies in the face of freedom. True freedom takes some personal responsibility. If government can mandate I purchase health insurance, they will have given themselves the power to mandate which brand of cereal I buy or what kind of car I can drive. If you cannot buy a car, you do not get a car. If you cannot afford a house and cannot borrow the money for the purchase of one, you don’t get one. Health care is the same. Sorry, but doctors and hospitals provide a service. No one is entitled to that service. A government which uses fear to scare people into allowing government intrusion into these areas of our lives will extend that intrusion into all areas of our lives. What government controls is no longer free. Government does not have my best interests at heart.

  6. James Joyner says:

    I guess drunk drivers will still be able to bankrupt kids and possibly their parents, right?

    I support mandatory auto liability insurance as imposed by states as a condition for the privilege of operating a motor vehicle. Those who can’t afford it have the option not to drive.

    Health insurance is more expensive than auto insurance and the lack of it doesn’t impose the same level of externalities.

  7. floyd says:

    Apparently, Dr. Frist is not as talented as Senator Frist,the former comes at you with a knife and takes all your money, the latter does it without a knife, more efficient I suppose!

  8. Zelsdorf Ragshaft III says:

    Odo, if you are not insured against fire and you have a fire. Who is at fault? Where does it stop Odo? If you cannot afford cable TV, what do you get to watch? What about the concept of personal responsibility? Why did the bike rider not have some kind of insurance? Odo, do you think you should be able to win the lotto if you do not buy a ticket. Do you think government should be able to mandate you buy a ticket? If not, why not? The money goes for a good cause. I also want to ask what you do about a system that is over loaded with demand and understaffed. Who will be the people who get the short end of the stick? No matter who pays the cost. Not everyone will be able to access a universal health care system. Some are alway more equal that others, Odo. Will it be the elderly who pay the price? You cannot increase use, maintain quality or improve quality for the same cost. The idea that it is possible to do so will financially ruin the country.

  9. PD Shaw says:

    Even if there is evidence of cost-shifting, it doesn’t answer the question of how to control total costs. That’s simply an argument for transferring costs between hospitals, the government, the working poor and credit card companies. The proposal is regressive to the extent it tries to shift costs back to James the Younger.

    It’s also a boon to the insurance industry. Insurers don’t care if government mandates increase insurance costs, that just increases their 3% profit margins. Unless, that is, people can no longer afford coverage. That’s where the mandates protect the insurance companies from lost revenue.

  10. DavidL says:

    Mandatory health insurance is a tax and it is a tax which Congress has no constitutional authority to impose. Hint it took constitutional amendments for Congress to get the authority to ban liguor and to impose the income tax.

    Remember, those who trade their freedom for the promise of health, will have neither.

  11. hcantrall says:

    What is the “fair” answer then? I understand that to make it mandatory would amount to a tax and isn’t right. At the same time though, lots of people choose not to buy insurance and when something happens and they need a doctor, cry the loudest about not having insurance or ability to pay for the services they need. I realize it is “expensive” but you know, I see lots of not wealthy folks at the checkout line in walmart. They’ve got new cars and iphones/blackberrys, Coach purses and various other higher end clothing. Makes me feel like the sucker, play by the rules and get screwed or don’t be responsible and other people will take care of you.

  12. Fog says:

    We have a conundrum here. We live in a society that mandates care for the sick and injured, regardless of the ability to pay. So, even if you libertarians refuse to buy insurance, after your auto accident, you will wake up (if you’re lucky) in a hospital. This will be true until such time as society decides it’s better to let you bleed to death on the highway. And until we collectively make that decision, poor, injured young libertarians will continue to be parasites.

  13. odograph says:

    James and Zelsdorf, remember this:

    I pay my health insurance. My non-profit insurance company is also required (morally and legally) to treat emergency victims. If James in his student days was mowed down, or just took a hard tackle in the park, my insurance company would treat him.

    I’d pay.

    Why do you fantasize about crazy worlds that don’t work that way? Do you really think hospitals are going to start kicking “young Jameses” to the curb?

    Do you want them to?

  14. JKB says:

    …my insurance company would treat him

    If you get your health care from your insurance company then you’re doing it wrong. Get your health care from a medical treatment facility and let your insurance company do their job of paying the claim on your insurance policy.

    The uninsured (and can’t pay) person is treated with the cost paid by taxes, higher charges to self-insured and somewhat but less so, negotiated group rates for insurance plans.

  15. odograph merely wants a perfect solution, that’s all. Those tend to be rather expensive and, of course, they never work.

  16. alkali says:

    Consider the following:

    For three plus years in my late 20s when I was in graduate school, I chose to forgo paying for household garbage pickup. I was bringing in a few hundred bucks a month and needed to pay for rent, utilities, car insurance, books, food, and incidentals. I just dumped my household garbage in the street, or in local parks. Spending money on household garbage pickup would have required me to either take a second job or go into debt.

    Is there a qualitative difference between requiring someone to pay for household garbage pickup and requiring them to pay for health insurance? If you don’t pay for the latter, you are dumping your risk of health care costs on the public.

    (For what it’s worth, there may be other good policy reasons not to mandate that individuals purchase health insurance, but “I’d rather not pay for that” doesn’t seem like a very compelling reason to me.)

  17. JKB says:

    Mandated catastrophic illness/accident insurance might be reasonable and even cost effective for the young given their low risk. The risk of ending up with a broken back while riding your bike is very low so the premiums to cover such injuries but no the common cold would be low.

    However, what Frist and others gloss over is that they want and need the low risk person to purchase large and comprehensive insurance policies that they will not use to reduce the cost of providing such insurance to the elderly, sick and pre-existing condition patients who will use more health care than the cost of their premiums. The whole mandated health insurance is just a cost shifting from the infirm to the healthy young. Otherwise, why not just mandate Health Savings Accounts that rollover to the next year with a reasonable annual contribution? In five or six years those who now forgo health insurance would have a nice savings to cover them in the eventuality of an illness or injury. The reason is that money saved is needed to pay the expenses of others who have an illness/injury and can’t be left in the control of the person who paid it in.

  18. odograph says:

    …my insurance company would treat him

    If you get your health care from your insurance company then you’re doing it wrong. Get your health care from a medical treatment facility and let your insurance company do their job of paying the claim on your insurance policy.

    Huh? This is about other people going for treatment, and the rest of us paying.

    How are you stopping that?

  19. odograph says:

    odograph merely wants a perfect solution, that’s all. Those tend to be rather expensive and, of course, they never work.

    Actually, I think I’m stubbornly asking for a solution that does not require fantasy.

  20. PD Shaw says:

    About 10 percent of the uninsured can afford to buy their own insurance (4.7 million), most of the uninsured are the working poor, students or non-citizens. LINK

  21. Steve Verdon says:

    So … we can’t have National Health, because that would be socialist. And we can’t have mandatory health insurance, because that would be absurd.

    Are you daft? It was the high costs. Look, highly unlikely/high costs events should not require a quarter of your income.

    They do becuase of mandates requiring all kinds of likely events being covered. One reason James’ costs might have been so high was pregnancy and child birth. Obviously not him, don’t be an idiot. But if he is cross-subsidizing, and believe me that happens when you have State regulators, then that sure could be a contributing factor. Let alone the penny ante stuff like glasses, routine check-ups, and so forth.

    Health insurance is more expensive than auto insurance and the lack of it doesn’t impose the same level of externalities.

    Politicians and policy makers are also more likely to use it for social engineering purposes. They like the idea of certain things be covered or being subsidized so they are. But does this happen with automobile insurance, probably not as much, but I’d love to see the evidence.

    Why do you fantasize about crazy worlds that don’t work that way? Do you really think hospitals are going to start kicking “young Jameses” to the curb?

    Do you want them to?

    Odograph wants to have his cake and eat it too, but the reality is that rising costs are going to prevent him from having a cake let alone eating it.

    The issue of coverage is a side show. The issue of what is covered, a side show. The issue of a public option, single payer, etc. are all side shows. The main attraction is costs and Frist’s argument does absolutely nothing to address that issue. Mandating insurance merely re-arranges the deck chairs on the Titanic.

  22. odograph says:

    LOL!

    Steve’s long post reduces to him wanting me to subsidize James, but not wanting James to subsidize other people.

    This is because James is not pregnant!

    And my not wanting to pay for free-riders, while James doesn’t have to, is “Odograph wants to have his cake and eat it too”

  23. kth says:

    I understand the libertarian case against mandatory coverage, and unlike most of their concerns it is fairly compelling (it’s frankly paternalistic, though that isn’t the dealbreaker for me that it is for libertarians).

    But do understand: if you are going to require insurers to rate policies on a community rather than an individual basis, and forbid them from excluding/rescinding people with pre-existing conditions, you have to have a mandate. Otherwise, people will wait until they get sick or injured to buy insurance, and rates will have to skyrocket or the insurers will go out of business.

    In few, no mandate = no universality. If you don’t care about some people being unable to buy insurance, that’s no big deal. But if insuring everyone is one of the points of health insurance reform, a mandate of one kind or another is pretty indispensable.

  24. floyd says:

    Mandatory car insurance is liability only and tied to an activity which is not essential.
    It therefore can not be compared legitimately to the imposition of mandatory health insurance.
    BTW mandatory car insurance doesn’t work anyway since the percentage of uninsured drivers has remained about the same before and after it’s imposition. The only differences in both cases are the enrichment of government coffers from fine money, and the incremental loss of liberty.

  25. odograph says:

    Only if you exclude free riders floyd, and kick young James to the curb.

  26. PD Shaw says:

    kth, that gives me something to think about, but my initial reaction is that people are going to be limited from gaming such a system by the fact that insurance won’t pay for costs already incurred. In other words, you would still need health insurance in place in the event of true emergencies where there isn’t time to sign up for insurance beforehand.

    I wonder if there is more of a “carrot” approach to this problem by mandating insurance companies provide healthcare coverage without exclusions for pre-conditions, so long as those preconditions were discovered or first diagnosed while covered by a previous healthcare policy. (You’d have to finesse the language to deal with people first entering the system, like young adults)

  27. Ben says:

    Odo, you still haven’t addressed James’s main point. Which is that, there are some people that SIMPLY CAN’T AFFORD IT. There are millions of people literally living paycheck-to-paycheck, with their monthly net hovering in the cents. And not all of them have new BMWs and plasma TVs and iPhones that they can cut out of their budget. Some people just barely make enough money to pay their rent, utilities, car insurance, and groceries. I know, I used to be one of them. If you make health insurance mandatory, what exactly are these people supposed to do?

  28. PD Shaw says:

    what exactly are these people supposed to do?

    Sell their body parts to people on Medicare. Let’s not forget that part of the deal here is that today a young person can buy a health insurance policy for $100 per month, while an elderly person will more likely pay $700 per month. LINK The House plan would raise the young person’s premiums to $267, so that the older person need only pay $533 per month.

    If we truly wanted young people to be in the system, we would be looking at charging them a premium to help pay for their parent’s insurance.

  29. PD Shaw says:

    we would not be looking at charging them a premium to help pay for their parent’s insurance.

  30. James Joyner says:

    Is there a qualitative difference between requiring someone to pay for household garbage pickup and requiring them to pay for health insurance?

    Yes. Garbage accumulation and pickup are routine, predictable events; getting sick or injured are not.

    I was covered for a motor vehicle accident, the likeliest cost of injury, at a quite reasonable rate. Insuring against the extraordinarily unlikely event that I came down with a debilitating disease in my 20s would have cost more than my rent and utilities combined.

  31. odograph says:

    Odo, you still haven’t addressed James’s main point. Which is that, there are some people that SIMPLY CAN’T AFFORD IT.

    I thought that’s what I was highlighting about the “no national health” and “no mandatory insurance either” argument. If people can’t afford it, what are you going to do?

    If you make health insurance mandatory, what exactly are these people supposed to do?

    I’m actually a moderate on this, as I think I am on a lot of things. I think that the far left folk who want to give everyone equal health care, regardless how hard they work, are pretty crazy. I also think the far right (or libertarian folk) who want to kick people to the curb are pretty crazy.

    Though, if you stop and think about it one of those forms of crazy is crueler than the other.

    What I’d like, as a moderate, as a plan that works with people as they are, in all their philosophies and conditions. I think the way you do that is with a voucher system. Everybody gets basic health insurance paid for by the gov. It is for saving your life only. If uninsured James gets his fingers cut off in a lawn mower, voucher insurance ties off the stubs and gives him antibiotics. If he wants fingers reattached, he can buy voucher-plus insurance.

    No free riders, and a safety net for basic life support.

  32. M1EK says:

    I was covered for a motor vehicle accident, the likeliest cost of injury, at a quite reasonable rate. Insuring against the extraordinarily unlikely event that I came down with a debilitating disease in my 20s would have cost more than my rent and utilities combined.

    The market fundamentalist would have said it was your own damn fault for choosing a ‘career’ that paid so little.

    Others might point out that there are plenty other somewhat-more-likely accidents your auto insurance wouldn’t have covered (getting hit by a car driven by an uninsured driver while walking across the street, for instance).

  33. odograph says:

    James, don’t rely too much on “unlikely event” phrasing. That just means you dodged the (rare) bullet, not that other youthful free riders are not sponging on us all.

  34. Furhead says:

    I realize it is “expensive” but you know, I see lots of not wealthy folks at the checkout line in walmart. They’ve got new cars and iphones/blackberrys, Coach purses and various other higher end clothing.

    I’m just trying to figure out how you know those folks aren’t wealthy if they’ve got new cars, iPhones, etc.

  35. James Joyner says:

    James, don’t rely too much on “unlikely event” phrasing. That just means you dodged the (rare) bullet, not that other youthful free riders are not sponging on us all.

    The event was indeed unlikely in the particular. It’s incredibly likely, if not certain, in the aggregate. But that’s a different problem.

    I actually would prefer a more straight-up socialist solution than an unfunded mandate. If society deems X level of care as the standard that all must have, then pay for it out of tax dollars.

  36. odograph says:

    The event was indeed unlikely in the particular. It’s incredibly likely, if not certain, in the aggregate. But that’s a different problem.

    I actually would prefer a more straight-up socialist solution than an unfunded mandate. If society deems X level of care as the standard that all must have, then pay for it out of tax dollars.

    I agree, and that has really been my subtext. I don’t like the implication above that (without national health or mandatory insurance) it is the job of my health insurer to care for uninsured people.

  37. Dave Schuler says:

    Judging from the discussion in this thread so far it looks to me as though the complaint is about the bankruptcy laws rather than about healthcare insurance.

  38. odograph says:

    By “above” I mean respondents, especially Steve 😉

  39. odograph says:

    Huh Dave? Do you think that if my insurer treats a poor person they should have better legal support to squeeze blood from a turnip?

    It’s still a turnip.

  40. TangoMan says:

    There is a simple solution to the problem of young people choosing to step out of the system – pricing variation.

    Price health insurance like whole life insurance. The younger you are when you buy your life policy, the lower the premiums for the rest of your life. So, induce a 19 year old to buy health insurance by having the actuaries calculate an age-adjusted premium. Make that premium lower than the cost a 30 year will pay to step into the system.

    The notion of community rating has to be thrown overboard. There is no justice in having a lower middle class family, who had their 3 children before they hit 30, having to subsidize IVF for a yuppie couple who delayed childbirth so that they could focus on their careers and now that they’re 43 they decide that they want to start a family. Delayed childbirth is a lifestyle choice, and many other medical treatments result from life choices and thus they differ from catastrophic accidents which is really the purpose for which medical insurance should be targeted.

  41. Joe R. says:

    And until we collectively make that decision, poor, injured young libertarians will continue to be parasites.

    And what does that make the people who take money from poor, young, uninjured libertarians?

    Here’s a hint: the answer is parasites.

  42. anjin-san says:

    Here’s a hint: the answer is parasites

    News flash Joe. If you suffer a catastrophic illness or accident, there is a pretty good chance you will end up a “parasite” too. Happens all the time. Hopefully you will become a more compassionate person without having to suffer a tragedy…

  43. Mannning says:

    MHI, as an earlier poster said, does not address the elephant in the room–medical costs. So we all sign up here for some version of MHI only to find out some time later that it can’t pay for serious problems at all because the real costs have risen out of sight, or else, all the doctors have walked to protest the “paltry sums” granted their skills by the insurers’ standards.

    What the left really wants is absolutely free medical care, and, in their great compassion and wisdom, I am sure they would have kept TS on tubes–forever. Multiply that cost by the number in the population that could (and would!) be sustained artificially until a “natural” death, and there goes the bank.

    Or….are we going to arbitrate who gets tubes and who gets taken off tubes? Death Boards anyone?

  44. Herb says:

    I support mandatory auto liability insurance as imposed by states as a condition for the privilege of operating a motor vehicle. Those who can’t afford it have the option not to drive.

    I don’t support mandatory auto liability insurance (or mandatory health insurance) because the end result is IINO (Insurance in Name Only) policies that don’t cover hardly anything, but do meet the minimum legal requirements (whatever they may be).

    I thought we were trying to reform our health care system, not trying to guarantee massive profits to insurance companies for providing essentially nothing in return.

  45. James Joyner says:

    I don’t support mandatory auto liability insurance (or mandatory health insurance) because the end result is IINO (Insurance in Name Only) policies that don’t cover hardly anything, but do meet the minimum legal requirements (whatever they may be).

    Many/most states require drivers to have liability insurance to cover damage to other parties’ vehicles, property, and persons with set minimum coverages for each category. They’re not IINO, except that enforcement is sometimes/often lax.

  46. Stan says:

    Assume that you lose your job or you work for a company that’s about to throw the burden of health insurance on its workers or that you’re self-employed. If you have a heart attack or your spouse is diagnosed with cancer or one of your kids is diabetic, you won’t be able to buy insurance except at ruinously high prices and you may be dropped from your current plan. Without an individual mandate any insurer, even the government in a single payer system, has to enforce pre-existing condition and rescission policies to stay afloat. Joyner is saying in effect that it’s OK with him if they do. I think this is short-sighted, and it’s significant that Bill Frist, now that he’s given up his political ambitions, agrees.

  47. Steve Verdon says:

    Congratulations on being a remarkably dishonest poster Odograph. My hat is off to.

    Oh, and my hat is off to your for being an idiot even when I warned you about it.

    GJ, dope.

  48. floyd says:

    Au contraire, Mr. Austin, all perfect solutions work perfectly….. and they are cheap![lol]