Most of the news coverage about Congress’ attempt to rewrite the Affordable Care Act may as well be on the sports page. It’s all about who’s winning and losing. Similarly, most of our elected officials stick to their shallow talking points because they are focused on winning politically, too. To talk forthrightly about health care means to acknowledge there will be trade-offs whatever public policy we pursue. Both parties are hesitant to face these realities head on.
We all know that money doesn’t grow on trees, but for some reason many of us seem to think that health care does, and we can have as much of it that we want or need. That is not the case. Health care is like any other good or service. There is not enough of it available for everyone to have as much as they desire. One way or another, there will be rationing. It’s just a question of how.
For most items in our economy, prices are the mechanism to determine who gets what. Some are able to afford the health care they desire at market rates, many can afford it only if they forgo different purchases, and others can’t afford it at all. We are a compassionate people and we don’t like to see others suffer. And so, through our government we have developed programs whereby costs are shifted from one group of people to another: from the poor to the rich (Medicaid), from the old to the young (Medicare), and from the sick to the healthy (Obamacare).
(Actually, the biggest cost shift is from the living to the unborn. All of these programs are financially unsustainable and are loading down future taxpayers with untenable amounts of debt. But that’s for another column.)
Taxes are just one way these costs are shifted. At least with taxes, though, we know who’s paying what. Increasingly, health insurance has become the vehicle by which costs are shifted. This method is particularly insidious, because the degree to which some are subsidizing others is not transparent.
Health care and health insurance are two different things. Traditionally, insurance is something you buy, but hope you never use. If you file an auto, home, or life insurance claim, that means something bad has happened. We willingly pay a relatively small amount of money to share the risk in the unlikely event something catastrophic occurs to us.
Health insurance is structured differently. You would never use your auto insurance to pay for an oil change, yet we use health insurance to pay for a routine check-up. Furthermore, it is common toward the end of the year when deductibles reset for a glut of elective procedures to get scheduled because that way someone else will pay for them. That creates upward pressure on premiums for everyone.
Also, both the federal and state governments require that health insurance policies cover a variety of treatments. At first glance this appears to be a benevolent gesture to force the big rich insurance companies to share some of their wealth. In reality, these costs get passed along to all customers, even those who wouldn’t buy that particular coverage if given a choice.
The regulation that has truly caused health insurance to not be insurance any more is the requirement that insurers cover pre-existing conditions. Consider if you didn’t have auto insurance and had a car accident, or if you didn’t have home insurance and your house caught on fire. If you called an insurance agent the next day and said you wanted to buy a policy and file a claim, they would likely laugh and hang up on you. However, if you didn’t have health insurance and were diagnosed with a costly disease, an insurer has to sell you a policy under current law. That’s crazy.
The Democrats’ answer to this conundrum was the individual mandate. Force everyone to buy insurance and nothing will be pre-existing. It’s hard to keep track of all the Republican reform plans put forth this summer, but some GOP proposals would have kept the politically popular requirement to cover pre-existing conditions but ditched the politically unpopular individual mandate. How about being honest with the American people? You can’t have one without the other.
Ultimately, we need to let health insurance be insurance again. Allow people to buy catastrophic coverage only and pay for routine procedures themselves. For those who can’t afford routine care, use public funds to pay for basic services, and reform malpractice laws for free clinics who provide charity care (again, a topic for another column). Don’t wreck the entire system in pursuit of an unattainable, utopian goal.
Health care is not a right. The irony is that treating it as such actually results less care for everyone, including the poor. How compassionate is that?
Respectfully…
Pete