Quote of the Day
Where are the uninsured? Did hardly any of them want coverage beginning Jan. 1?…We just created a giant new entitlement to take care of these people. Why aren’t they showing up to take advantage of it?
Health Care Policy and Reform Insights | NCPA
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“The second possibility is more troubling: There may be something seriously wrong with our understanding of who the uninsured are, and what they are willing and able to buy in the way of insurance. I don’t know exactly what the fault may be in our understanding. But if the numbers stay this low, I’d say we need to reassess the state of our knowledge about the uninsured — and the vast program we created to cover them.”
I think Megan has hit the nail on the head here.
In economics there’s a saying that insurance is a good that consumers don’t really want and are loath to seek out. Nobody really wants insurance; rather they want financial protection from the risks that may occur if they don’t have insurance. Yet, to proponents of the Affordable Care Act insurance represents far more than financial protection and a transfer of risks to a third party. Proponents consider health coverage a proxy for equality and access by those who cannot afford to pay out of pocket for medical care. Yet, for the people subsidized health coverage is supposed to help, the mere fact that coverage is available may be enough to mollify the worry about access to care in the event of need. Past experiments have illustrated that low-income families prefer limited benefit plans with no-deductibles for primary care than unlimited benefits but a high deductible.
I think that the general mistake is to state that people that were uninsured lived in that condition because they were forced to. Many don’t believe in having insurance, they are either risk-lovers or risk-neutral. If I am a rather healthy individual, who sporadically visits a doctor why should I be forced to pay for an insurance that I don’t want or don’t need?
We have to take into consideration that people that are uninsured were for a reason. They were not going to wake up on January 1st and state: “hooray I can buy insurance; l will spend the rest of the week trying to figure out how to get one.” Uninsured individuals are not going to go through the pain of healthcare.gov to get a coverage that they don’t really want.
Obamacare was a mistake that is going to hurt American consumers. When legislation is rushed things tend to go wrong. ACA will become a beacon of what not to do.
Devon is completely correct. Mini-med plans are in fact popular if they have low deductibles and cover primary care.
A low income person suspects that if they do have a major illness, then either the hospital will forgive the bill, or the hospital will bill them and they can declare bankruptcy. (or if possible, the hospital will enroll them in Medicaid right on the spot.)
The ACA supporters have been idiotic in their condemnation of mini-med plans.
I know Devon Herrick has advocated that mini-med plans should be available. However, they are incoherent with consumer-driven health care.
It would be systemically better for an employer with a low-paid workforce to give them HRA deposits and send them on their way. To facilitate price transparency, perhaps the local restaurant and retail associations could negotiate a fee schedule with the county medical society.
I have no doubt that mini-med plans are popular to sell. I expect that the profit and commission are very high. With respect to employers like Burger King, I would bet there is internal cross-subsidy between the ASO (administrative services only) contract for the self-insured (ERISA) part of the workforce and the mini-med plans for the workers on the floor.
That is, brokers and TPAs offer a better deal on the bundle than they would on each piece. So, employers go for the mini-med.
But I am just speculating, because I cannot see the rationale, especially for fast-food workers who last 6 months or so on the job.
John I can see two potential problems with your idea of HRA’s instead of minimed policies:
1. From my experience, it is hard for me imagine that the restaurant associations would put in the effort to negotiate fee schedules. This is a very tight fisted group, with their time and their money.
2. For a person living on restaurant wages, can the HRA funds really be kept intact and not raided for rent, etc.
I like what you say in theory, but in this case I wonder about practice.
I think you are right: They will surely find a way to winkle the money out of the system and use it to pay for non-medical expenses.
But the flip side of that is that I’d bet they have very low medical expenses, i.e. mini-med plans have low medical-loss ratios (like plans for university exchange students).
Do we really care if they winkle the money out of the HRA? (Please, let’s not hear anyone propose that the preventive-care benefits of a mini-med plan reduce unnecessary emergency-room use.)
“We just created a giant new entitlement to take care of these people”
Yep. We completely dismantled our entire system and made it worse for everybody to deal with a very small amount of those who were uninsured and had preexisting conditions.
The vexing issues discussed here are a classic example of the American approach to health insurance. We want to solve the gaps in coverage by persuading people to buy something. A little nudge from a mandate, a little incentive from a tax credit, and a little appeal to prudence– all this is to create a ‘marketing campaign’ to draw in the uninsured.
Joseph White discusses this often-futile syndrome in his classic work Competing Solutions from 1993.
Per Prof White, the European approach is much different. They assume that every wants health care when they are sick, and that hospitals are going to have to treat everyone, so therefore everyone should pay a tax for health insurance.
I call this the fire station approach. When larger cities and counties build fire stations, they do not try and fund their firefighters will appeals to buy fire insurance. Instead they levy taxes. (commercial fire insurance is to replace property, NOT to pay the firemen.)
We need a little more European realism in my view. The Democrats go for marketing, and many Republicans go for rugged individualism. Neither of these approaches creates a viable fire department or a viable network of care.
Is health insurance comparable to commercial fire insurance or the fire department? That is a fundamental question. I can see that controlling epidemics, for example, is the “fire department”. However, I’m not convinced that personal health care is “fire department”.
If a fire is left uncontrolled, it can jump to neighbors’ houses. Except for communicable diseases, the same is not the case for health care.
(We could have a whole other discussion about whether public fire departments are necessary. Some assert that the subscription fire brigades of yore worked better.)
I agree that it may be a stretch to include all self-contained illnesses within the category of public health.
For that reason, my writing usually proposes that emergency care should be considered what we will loosely call a public good.
I am glad to pay taxes to care for my neighbor’s broken leg, because if I get a broken leg I want to be care for right away without a credit check or an insurance card.
Like you I suspect, I am not so willing to pay taxes to care for my neighbor’s high blood pressure. He may not be in any pain and the odds are enormous that he earned this condition himself, i.e. he was not born with it.
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