Correction: This story has been modified from its original version. — The first sentence was clarified to say "most notably requiring all citizens to obtain health care." The Collegiate Times regrets this error.
While the health care reform recently passed by Congress does not contain “public option” (government-run health care plan), that does not mean it is without questionable provisions, most notably requiring all citizens to obtain health care — or face a fine — and outlawing the denial of coverage based on preexisting conditions by health insurance companies. Relevant comparisons to other forms of insurance, such as auto insurance, help to highlight the issues with these provisions.
The requirement for all citizens to obtain health insurance or face a fine is similar to auto insurance laws, which require drivers to have auto insurance or pay an uninsured motorist fee. However, the key difference between health insurance and auto insurance is that driving is a choice; therefore, choosing to drive comes with the reasonable obligation of obtaining insurance.
Health insurance, on the other hand, is no longer a choice. Your mere existence mandates that you have health insurance. It is now the first commodity that U.S. citizens are required by their government to purchase. The precedent set by this provision is frightening and the Supreme Court may be called upon to determine its constitutionality. There is also little doubt that this provision represents a restriction of individual choice and, by extension, freedom.
Outlawing the denial of coverage based on preexisting conditions by health insurance companies is similarly nonsensical. In this situation, it is important to understand the principles associated with insurance. Insurance premiums are based on risk. A young, healthy person is less likely to get sick than an older person who smokes and has high blood pressure. The younger person will pay a lower insurance premium.
This is analogous to auto insurance when young inexperienced drivers (or those with a poor accident history) pay more for insurance than an experienced driver with a stellar record.
The relevant health care situation is when people who do not have health insurance become sick. Currently, they would probably apply for insurance and either be accepted at elevated premiums or denied coverage because their risk is known to be high — it’s already known that they are sick and will need to draw benefits. This recently passed health care reform requires that these people now must be accepted by insurance companies at the same premiums as others, despite their much higher risk.
This mandate defies the entire logic upon which insurance is based. It would be like wrecking your car without insurance and then being given insurance at the same rate as your neighbor with a perfect driving record. The only possible results from this are higher premiums across the board, which is the opposite of what the reform is supposed to do, or private insurance companies going out of business.
These problematic provisions combined with a completely partisan process — not a single Republican voted for it in the House or Senate and 34 House Democrats voted against it — and 54 percent of the public opposed to it, lead me to question the entire process and the politicians who passed it into law. I hope you’ll take a look for yourself and express your opinion with your vote in November.
Matthew Hiser
Senior materials science and engineering major
A version of this article appeared in the Apr 1 issue of the Collegiate Times.
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Two objections to key assertions made in this letter:
1. Health insurance may be a choice but healthcare is not. The simple fact is that when someone who can not afford care needs care, they will get it and tax payers, those with insurance, and the healthcare industry will subsidize this cost. The benefit to mandating health insurance is that some of these folks will seek preventative care before becoming more seriously ill, reducing overall costs. This provision is no more a restriction of freedom than that of medicare, social security, and yes- mandates and fines for auto insurance. These laws are set forth to protect individuals and society when something bad happens to someone who has not adequately prepared for the situation.
And 2. the provision involving claims of preexisting conditions does not only apply to those who are seeking to buy insurance, it also protects those who have insurance already. I myself have had charges from a doctors visit for a knee or ankle injury disputed under the guise preexisting conditions-even though I had held my insurance with that carrier for over a year. Needless to say, costs were covered after many emails, phone calls, and paperwork. This law protects consumers from arbitrary biased exclusions from coverage they have been paying for. Insurance companies will just have to live with covering what they say they will at the price offered instead of using a merry-go-round of back-handed attempts to off-set costs back to their own customers.
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Comments on your objections:
1. You are implying that forcing every citizen to have health care is the only solution for these subsidized costs. Is it possible that the government could have provided tax incentives for health care providers and insurers in these special cases? Were other options even explored for this specific problem? And yes this is a restriction of freedom. For there are citizens in our country that do not pay into the SS/Medicare system (too poor) nor have auto insurance (if you don't own a car...) BUT now every citizen HAS to have health insurance (or pay a fine). You say that these laws are set up to help people for unexpected situations... that's what health insurance was in the first place (you paid in advance even before you needed health care so when that situation occurred you were prepared)
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People who are too poor to pay into SS/Medicare won't have to purchase health insurance. If it costs more than 8% of your income you aren't required to purchase it.
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Brady - In the process of attempting to refute my argument you are nullifying the original argument that health care insurance is needed for the poor to help prevent subsidized costs. Plus we've already addressed the issue that no one is required to buy the insurance, yet there is a fee if you don't.
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Part 2:
"Needless to say, costs were covered after many emails, phone calls, and paperwork." -- Are you naive enough to expect that more bureaucracy and laws will cut down paperwork?
"Insurance companies will just have to live with covering what they say they will at the price offered" -- Now they are forced to offer the same price to everyone and just eat the cost/risks? Do you honestly think these companies will lay over and take it? That there wont be a fallout on other citizens premiums or health care packages offered by companies? As of last week multiple Fortune 500 companies already declared that this bill was going to cost them billions (Verizon, Valero Energy, AK Steel; John Deere and Caterpillar = combined quarter billion dollar; 3M = $90 million; AT&T = 1 Billion; etc.) Now tell me how many jobs those costs could employ.
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The bill is "costing them billions" only because of a closing a loophole that allows corporations to write off subsidies given to them to help pay for their employees' Medicare Part D plans. They got the money tax-free and then got to write it off when they spent it on the plans. It has nothing to do with your unfounded assumption that insurance companies are going to raise their rates.
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Brady: Your lack of reasoning skills are as astounding as your reading skills. The specific topic you address relates to my point that companies will not be able to offer the same health care packages to its employees. If you wish to stay at an elementary level of debate and continue twisting points and facts to suit your needs then so be it, but please stop posting until you are ready to join the big league of rational thought.
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Ford, a simple "The specific topic you address relates to my point that companies will not be able to offer the same health care packages to its employees" will do. No need for insults.
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The difference between car and health insurance is night and day. When you choose to drive a car, you are only required to insure others against your potential recklessness. Only liability coverage is mandated, and that is to protect others that may be injured or have their property damaged by you. Whether you have coverage for yourself is up to you or your lienholder.
The problem with the law is that it imposes a set of restrictions on insurance companies that, when implemented collectively, will make it extremely difficult for insurers to remain solvent while providing quality services. In Maryland, the legislature regulated the gas and electric company rates for years, to the point where they were held artificially below fair market value. The result: once the regulation expired, the company roughly tripled its rates to account for lost revenue.
The point is that in both cases, the government has implemented unsustainable regulations that prevent companies from being fairly compensated for the service they provide. Instead of tying rate levels to some sort of index price, they blindly put forth limits in terms of absolute dollar amounts. I don't doubt that companies can often stand to streamline their operations, but this bill ambushes insurers from multiple directions, and I would be surprised if even the most adept executives will be able to keep their companies in the black while complying with every regulation.
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This bill is practically a handout for insurance companies. If it's going to be soooo tough for them, why did almost every large insurer's stock jump when the bill was passed.
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Because insurers can magically change their own stock prices amirite?
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Forgive me. I forgot that investors are never wrong.
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Unsustainable mandates for insurance companies is precisely what the crafters of the bill have intended. Once they increase rates (and they will because there is no other solution), the gov't will turn around and say "see, they are just being greedy. Here, try our gov't plan". This is their way of mandating the insurances companies out of the health care market so they can eventually institute a full single payer system. Baby steps. Clever, costly, baby steps.
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Very observant, but I anticipate more of a bailout and takeover strategy so they can force more regulation.
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