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12/17/2010

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Jimbino

What a skewed argument!

Why should Zuckerberg be forced to buy health insurance? Why should an American living in France be forced to buy health insurance? They are forced to under Obamacare, and when they do, they will be subsidizing you!

Why not force folks to buy food insurance or love insurance? Why? Because if they don't have it they'll just come to you to get it for free when they need it.

Patrick S. O'Donnell

Jimbino,

As the Los Angeles Times editorial noted today,

"[C]ontrary to [Judge] Hudson's pinched view of the individual mandate, Congress did not cross that line in the Affordable Care Act. That's because the mandate isn't merely an attempt to regulate the purchase of insurance. It's a vital part of a larger scheme to overhaul the healthcare industry, including the way medical services are delivered and paid for.

There's no question that healthcare is a form of interstate commerce subject to regulation by Congress. Nor is there any question that the adults subject to the individual mandate participate in that market, whether it be buying aspirin at a drugstore, visiting a doctor for a checkup or rushing to an emergency room for treatment. (The law exempts Christian Scientists and others who abstain from medical care for religious reasons.) The individual mandate affects how people pay for the care they consume, but it doesn't force them into the healthcare market — they're already there.

In that sense, what's at stake isn't Americans' cherished 'right to be let alone.' It's whether they'll continue to be stuck in a system in which millions of uninsured people force those with insurance to pick up at least part of the tab for their visits to the emergency room and for the untreated diseases that they spread. Two other federal judges have held the law to be constitutional for just that reason. As District Judge George Caram Steeh in Michigan wrote in an October ruling, 'Far from "inactivity," by choosing to forgo insurance, plaintiffs are making an economic decision to try to pay for healthcare services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars — $43 billion in 2008 — onto other market participants.'"

In other words, this is about "risk pooling" and "free-riding," and the consequences of ignoring these issues not only endangers the basic health and well-being of the poorer people in our society and many at the lower end of the middle class, it leads to disparate economic burdens (economic inequity) placed on other parties.

Consider too the following from David Lazarus, a Business section columnist for the Times:

"I understand why the idea of an insurance mandate is troublesome to some people. Any time the government says you have to do something, it goes against the grain of good old-fashioned, don't-tread-on-me, live-free-or-die American values. But here's the thing: If we want to rely on private companies for our health insurance, and if we want them to cover everyone, then we need to spread the risk as widely as possible to keep costs down.

'You have to have a mechanism to get healthy people into the risk pool along with sick people,' said Paul Ginsburg, president of the Center for Studying Health System Change, a nonpartisan Washington think tank. 'If you don't,' he said, 'people will just wait until they get sick before being covered. That will cause premiums to go way up.'

Higher premiums, in turn, would deter more people from buying insurance, and before you know it, we're back where we started, with millions of people lacking coverage. Worse, insurance companies might decide there's no upside to having to provide coverage to anyone who asks, and they might stop offering individual insurance altogether. That would leave us even worse off than we are now.

About 50 million U.S. adults were without health insurance for at least part of the last year, according to a recent report from the U.S. Centers for Disease Control and Prevention.

The healthcare reform package spearheaded by President Obama wouldn't remedy that. At best, it would extend coverage to about 30 million people now lacking employer-based insurance. But that's a big step in the right direction.

A poll last month by the Kaiser Family Foundation found that 71% of voters favor the provision in the reform package that would prohibit insurers from denying coverage to people with preexisting conditions or other medical issues. Most Americans clearly believe people have a right to insurance. Yet that same poll finds a nearly identical percentage of voters — 68% — are against the individual mandate. It's a classic case of wanting a puppy as long as someone else walks it twice a day and cleans up after it. So let's cut to the chase.

To extend insurance to the broadest number of people for the lowest possible price, you have to spread the risk equitably among those who probably will be taking advantage of coverage and those who will not. In the case of healthcare, that means having both sick and healthy people in the risk pool. That's how insurance works (along with sufficient regulation to ensure fairness). [....]

The United States, for better or worse, is committed to a private-sector-run, employer-based health insurance system. Yet we face the extraordinary problem of 50 million people without insurance. People who find that unacceptable — and I believe that's everyone — will need to come around to the idea that insurance basically means safety in numbers. It would be nice if everyone would just voluntarily participate in a system that ensures coverage for all.

But that's not going to happen. That's why mandates aren't just smart. They're essential."

Patrick S. O'Donnell

Incidentally, Robert Goodin has a nice summary of the mechanisms at work in cases where private insurance markets fail:

"One of the more important ways has to do with the problem of 'adverse selection.' If participation in the insurance scheme were voluntary, and if individuals had better information concerning their own true risks than did underwriters [an assumption those of libertarian suasion appear to make], then better-than-average risk would opt out of the scheme (preferring to self-insure) and only bad risks would be left in. Premiums would have to rise to cover the above-average level of claims from those now left in the pool. As the did, more people would find it to their advantage to opt out [a slippery slope mechanism of the kind we discussed today at Mirror of Justice!]. Eventually, only the very worst risks would remain in the pool, and the whole scheme would collapse. To remedy the problem of adverse selection, insurance must be made compulsory."

Where risks are interdependent, as they are in not a few insurance markets (e.g., unemployment insurance), there "can be no guarantee (as there can, through the law of large numbers, with independent risks) that premiums from 'winners'...will suffice to cover claims from 'losers.'"

It's market failures of this sort that lead to collective intervention in or coordination of certain insurance markets.

Jimbino

Smart as you think you are Patrick S. O'Donnell, you haven't answered my questions:

Why should Zuckerberg be forced to subscribe to illness insurance?

Why should an Amerikan expatriate living in France be forced to subscribe to illness insurance?

Neither will show up at your emergency room looking for free treatment.

Patrick S. O'Donnell

I don't know who Zuckerberg is but I assume that with the benefits and privileges of citizenship come its obligations and duties ('burdens'), so if the individuals in question are U.S. citizens, then they should be compelled to be part of this insurance scheme.

By the way, I'm curious as to how you came in possession of my understanding or knowledge of how smart or ignorant I believe myself to be?

Jimbino

Patrick S. O'Donnell,

If you don't know who Zuckerberg, billionaire Man of the Year, is, you don't know much about anything.

So just answer the questions and stop trying to show off your ignorance.

Kris

I admire Zuckerberg for his successful life today. I just want to say that you don't own Zuckerberg's life and we don't care if he is going to buy health insurance or not.

Also, health insurance is for our common good. If you don't like the government for their project, then make a solution for your problem.

But Jimbino was right. We should not be forced to buy health insurance. I am talking about our liberty here. It's up to us if we buy it or not.

Kris

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