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Jesse Larner

Jesse Larner

Posted: September 20, 2010 11:48 AM

On August 3, 2010, voters in Missouri voted overwhelmingly -- 71% -- in favor of a ballot measure that empowers the state to reject one of the fundamental measures of the health care reform legislation recently passed by Congress: the individual mandate that requires otherwise uninsured people to buy private health insurance, or pay a fine.

This vote was predictably touted by right-wingers as resounding evidence that the American people don't want to pay for their neighbors' health care costs, and they don't want health care reform "crammed down their throats. As Austin Hess, a "tea party" zealot, put it:

Can you imagine if the British said not only do you have to pay the tax on tea, but you have to buy the tea and you have to buy the tea for your neighbor?

What the vote really means is that the good people of Missouri want health care, but don't want to pay for it, and don't want to take any responsibility for their own health risks. Those who voted for the measure are in fact demanding that their neighbors pay for their -- the rejectionist voters' -- health care. Furthermore, Congress' health care measure isn't doing anything that anyone didn't ask for, although it does illustrate the painful fact that if you ask for something, you should be prepared to pay for it.

Let's go back to 2008 and early 2009. Back then, everyone was rightly scandalized that health insurance companies were refusing to insure people with pre-existing conditions, denying medically necessary care on technicalities, or kicking people off coverage once they became ill. There was overwhelming public support for preventing the insurance companies from doing these things. Barack Obama campaigned on -- and was in part elected on -- promises of near-universal health care coverage.

So Congress got to work on a measure that would forbid private companies from refusing to insure anyone with pre-existing conditions, or terminating policies when an expensive claim is filed. Doing, that is, just what the people had asked -- demanded!

There was just one problem with this. Forbidding insurance companies to deny coverage because of pre-existing conditions encourages young and healthy people to game the system: to not purchase health insurance unless they get sick, knowing that they cannot be refused. To freeload on the risk pool, which messes with the actuarial basis of benefits and premia and drives up the costs of insurance for all those who know they are likely to have immediate medical needs.

There are several ways that health care reform could have dealt with this problem. The simplest, most cost-effective, and most obvious one -- with a proven record of success in most of the world's democracies, which have better health care stats at far lower per-capita cost than we do -- would be a system of public, social insurance. Everyone pays a premium out of his or her taxes; everyone is covered. Once you factor in the covert costs of employer-provided healthcare (as reflected, beyond employee contributions, in lower take-home pay) or the overt costs of buying health care as a freelancer, such a system would be much cheaper than any private insurance we have now, for obvious reasons: when everyone's in the risk pool, the costs even out, and administrative overhead is low. What's more, wages and employment would rise as the health care burden on employers was eliminated, and as an unfair aspect of competition with European companies (which do not have to pay for their employees' insurance plans, since there is social insurance) was removed.

Universal coverage would mean that people would go for recommended checkups, which is very cost-effective since prevention is much cheaper than cure. There would also be no uninsured people who have to report to the emergency room for routine care, one of the most expensive venues for treatment.

Social insurance does not mean government-run health care. It only means government paid health care. Under a system with taxes high enough for decent universal care, and co-pays high enough to discourage unnecessary consumption, individuals would still be absolutely free to choose their own doctors within a free-market system, and choose an agreed treatment plan. I've written about what such a model might look like here, although this is not the only way it might be implemented.

Unfortunately it's very easy to manipulate American public opinion, especially when backed by several billion dollars in contributions from the insurance and pharmaceutical industries. All some ambitious legislator or proudly know-nothing Republican activist has to do is to stand up and say, "But that's socialism!" and support for an approach like this will wither. That's why universal social insurance was never even on the table.

So what was Congress left to work with, in trying to do what the American people had asked - getting rid of bans on coverage for pre-existing conditions, getting everyone covered? If social insurance was out, Congress had no choice but to go with the individual mandate that so inflames the right.

It is arguably redistributionist, under a system of social insurance, to insist that everyone pay health insurance taxes. Yes, under such a system the young and healthy effectively subsidize the old and sick. This would be terribly unfair -- if the young and healthy were going to stay that way forever. Since they're not, it's not unreasonable to insist that they contribute their good health and their money to the risk pool, much as young people pay into Social Security so that they can collect later on down the line (yeah, we need to reform Social Security too; that's another issue.)

I would have preferred universal social insurance to the terribly inefficient and inherently corrupt system of rewarding private insurance companies that Congress came up with. But the individual mandate is not about redistributionism. It merely insists that individuals take responsibility for their own risks, that they not become a burden on the public. It is the opposite of redistributionism.

The Tea Party people who have rejected both social insurance and the individual mandate are refusing to take responsibility not only for their fellow citizens, but for themselves. It's the most puerile and ignorant form of selfishness.

If you reject both these things, can you be absolutely sure that you won't come down with a brain tumor and require a million-dollar operation? And don't tell the rest of us that you'd purchase insurance on your own, so we're required to stand by and just let the irresponsible among us die. We want to be a civilized society, even if you do not.

The Tea Party people will defend to the death -- perhaps literally -- their right to be bankrupt and ill in an entirely privatized system of health care. This is lunacy. More distressingly, it is freeloading on the hopes and aspirations of the majority of Americans who do want universal coverage, even if we do not agree on exactly how we get there.