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Zack Cooper

Zack Cooper

Posted: October 20, 2009 07:05 AM

A Health Insurance Mandate and Corporate Monopoly

What's Your Reaction?

Requiring every American to own health insurance is tough medicine. A mandate to own health insurance can feel like a tax; it can be characterized as government overreach, and unless the subsidies are generous enough, it will feel like health care reform is putting the hammer to the middle class. And depending on which poll you look at, 50% to 70% of Americans oppose a mandate.

Nevertheless, a mandate is the key to creating successful health care reform. Without a mandate for every American to have health insurance, health care reform will fail. Ultimately, the polling data on a mandate doesn't matter; international experience tells us that people will warm to a mandate over time and will certainly not oppose it once they feel the positive impact it has on all of our health insurance coverage.

Here's why...

Right now, there are two ways for insurance companies to make money. They can improve the health of those they insure or they can invest their time and money trying to exclude the sick or the likely to be sick from buying coverage. In our current health system, it is far more profitable for insurance companies to focus on denying care, rather than improving the health of those they insure.

This is the opposite of every other country in the developed world. At the moment, the incentives in the US health system are for sickness care, not health promotion. Most American doctors get higher pay for delivering more care, not necessarily for providing better medicine. Likewise, insurance companies get rewarded for excluding those who might fall ill, rather than helping to improve the health of those that they already insure. And as long we keep these backwards, ill-conceived incentives in place, health care in the US will cost far more than it does any where else in the world and will continue to have patchy quality.

The only way to go from sickness care to health promotion is with both tougher regulation of insurance companies and a meaningful mandate for individuals to buy health insurance. If we require every American to have health insurance and we say that insurance companies can't make money by avoiding sick patients, the insurance companies will only survive if they focus on getting their insurees healthy and developing innovative ways to keep them that way. Those are the type of incentives we need for success.

Part of the political problem with a mandate is that it is precisely what the insurance industry wants. To many Democrats, this makes a mandate feel like a simple giveaway to the insurance industry with no quid pro quo. And, in light of the release of the blatantly self-serving and obstructionist report from the insurance industry's lobbying arm, the America's Health Insurance Plans, it's hard to blame anyone for feeling that way. But, this isn't the whole story. Turning a blind eye to a mandate as a form of revenge would be cutting of our nose to spite our face.

We usually think of the Republicans as the party of industry competition. However, over time, Republicans have morphed into the party of monopoly and their brand of monopoly is trouble. Their brand of monopoly enables insurance companies to be shielded from competition and exempted from having to step up their game to meet customers' needs. This has hurt us all. Private companies operating in monopoly markets are bad for the American public.

Think about it for a moment...we have about a sixth of our economy in a market that has no competition and zero pressure to slow spending.

That's where competition comes in. In addition to requiring everyone to buy insurance, we need to make the health insurance market more competitive. That competitive pressure is what's going to keep insurance companies honest. With healthy competition, insurance companies won't be able to sit there and charge outrageous prices. In a competitive market, if they do, they'll be priced out and forced to close, just like any other company failing to meet their customers' needs. That's why I'm encouraged by recent efforts to repeal the antirust exemption for health insurance companies.

We also need to go further and make sure every American has a meaningful choice of health care plans with one guaranteed viable option. More than ever, in the wake of the insurance industry's report, we now see why a public option is a must. If the insurance industry were really interested in improving health care reform, they would have published their report months ago, when it could have helped shape the debate. Dropping their report at the 11th hour only served to highlight that insurers are interested in their own welfare, not progress.

A final point. Health care polling has been all over the map over the last few months and is testing the resolve of policy-makers and politicians. However, even the best polls out there are a snapshot of an unfinished race. The polls that matter are the ones that will reveal how Americans feel about health reform feel once they've experienced it's benefits.

While we'll never know how the American public would react before legislators act, we can get a good clue from Switzerland. There, a mandate for citizens to own health insurance won by the slimmest of margins. Today, more than a decade and a half after the Swiss reforms passed, a far greater percentage of the electorate and vast majority of the population support the mandate and don't want to see it over turned. The Swiss perceptions of the reforms shifted once individuals felt the difference it made in their lives. That's a lesson we're going to need to take to heart in the US.

 
 
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09:01 AM on 10/22/2009
I can tell you that once people realize what this mandate is all about, and see the hefty financial penalties imposed on them for choosing to pay for their mortgage rather than buy into expensive and crappy private health insurance, you will see the biggest uprising of citizens this country ever saw.
Sticks do not work on the American people, carrots work much better and have a much better chance of having a long term positive effect. Having a comprehensive public insurance option available for all Americans, that would obviously be way more affordable than the private insurance plans, and would offer better services because it would be focused on patient care rather than profit margins, would encourage people who don't have insurance by choice to seriously look into it and eventually, get health insurance.
You cannot have a mandate in this country on something that is not a priviledge but a human right. Health insurance is not like auto insurance! Owning and driving a car is a priviledge, and one earns that priviledge by obtaining a license, registration, auto inspection and insurance--all intended for the public safety. If you don't want to pay for auto insurance, you have a choice of not owning a car. A mandate on health insurance does not have that out. One cannot choose to no live if one does not want to own health insurance! A mandate on health insurance w/ hefty penalties is mafia style extortion authored by the private insurance cartels.
08:58 AM on 10/22/2009
It is one thing to mandate insurance, requiring insurance companies not to make a profit off basic insurance policy, and quite another to mandate insurance, and not require insurance companies to not make a profit off basic insurance policy. Cooper would like readers to believe our proposed health reform would operate like Switzerland, but leave the insurance companies free to make profits off all basic policies. He must have missed some classes in his economics schooling. But then, economics graduates aren't known for their discipline.
08:49 AM on 10/22/2009
No Zack, history shows us that any regulation on any big industry in this country always contains ways in which these industries can by-pass the regulations and continue to steal from the American people. The ONLY WAY TO REFORM THE HEALTH INSURANCE INDUSTRY IS TO HAVE A STRONG AND COMPREHENSIVE PUBLIC HEALTH INSURANCE OPTION AVAILABLE FOR ALL AMERICANS, INCLUDING SENIORS. A mandate will only raise anger and resentment at our government because our government has a horribly outdated way of calculating how much income is considered 'low, moderate or high income'. Many people who are uninsured by 'choice', who are considered, by government formulas, to be 'middle income', are living paycheck to paycheck and do not have the extra income to pay hundereds of dollars in health insurance! (yes there are those who are wealthy who chose not to buy insurance because they pay for their health care out of pocket) . Many of these people (middle income) are healthy and to force them to part with money they don't really have without offering more affordable alternatives like a public health insurance option would be tantamount to extortion mafia style. The private insurance industry is the only one who would benefit from a mandate, and the American people will be left, once again, paying the price for private insurance industry greed.
01:43 AM on 10/22/2009
Excellent post . Bravo . Now i can only hope that your leaders see the light and DO what is right .
09:06 AM on 10/21/2009
Of course the health insurance industry would love a young healthy pool of payees, the coverage needs to be there when people get sick, or are they angeling for the young healthy pool of payees paying for the sick much like younger workers pay into social security.
02:51 AM on 10/21/2009
Yes. I'm getting older and may be needing more health care soon. Passing this mandated insurance would force younger healthier people to subsidize my sickness. Hope there are enough young healthy people with jobs.
06:29 PM on 10/20/2009
The answer is not a public option. The answer is SINGLE PAYER universal coverage (if someone prefers the coverage they have, they may keep it). The one who flops after he flips never should have moved from that position. Arguably, he never held that position, but should have. Single payer is less expensive than the public option & removes the profit from the insurance companies. Last week insurance was denied to a 4 month old for being too fat. Today, a child was reportedly denied coverage because she is too small. The industry is evil & should be discarded to the scrap heap of history.
09:04 PM on 10/20/2009
Amen.

The arguments allowed in the present agenda are BS, based on lies and distortions. Motivated by money - profits for the insurance and drug companies and campaign contributions (bribes) for the politicians.

And the costs will be paid for by the common folks through higher taxes, enrollment costs and prices for drugs and services.

I'm on medicare. It works. Extend it to everyone and include dental and mental health care. Also scrap the senior drug program (which was designed to aid the drug and insurance companies) and include rug benefits in the new plan.
01:25 AM on 10/21/2009
Another part of the problem is the reference to a public option or single payer. I am not sure you understand it. I am not sure I understand it. It is my understanding that the vast majority of us do not understand exactly what they are debating for us. The more we know, the more (I am afraid) we will learn how badly they are doing for us, both as individuals & as taxpayers. I believe the public option is essentially Medicare for all. Single Payer means the government provides the service. Medicare pays insurance companies who make a very substantial profit. The profit directly corresponds with the savings single payer would provide minus any additional services which may be provided because your baby is not too fat or too thin to be insured.
RTIII
Poster of over 0.0135% of all HufPost comments
06:13 PM on 10/20/2009
No.

What Zack doesn't get is that most of us without health care insurance can't afford it and none of the proposals to help us pay for it have any chance of helping us cross the chasm. If we can't pay for it already, we surely won't be able to pay for it when forced, either. Well over 10% of us have no jobs - how are we supposed to pay for insurance, even with a subsidy?

What else Zack doesn't get is that this isn't Switzerland. Switzerland is a very wealthy country - far more wealthy than we are. I'd be VERY surprised if they have _any_ poor people - poor by U.S. standards. Switzerland has a far higher standard of living than we do. ...Don't try blowing any of that "the USA is the greatest nation on earth" smoke up my as, I'm not that dumb.

Zack had a whole article's space, I only have 250 words, there's not room enough for me to address his points one by one, but the very short of it is, what we need is single-payer, like the REST of Europe. Then, it won't matter if we are temporarily unemployed, etc, and everyone who can pay will be paying when they are able - no need for messy periods of time when a premium can't be paid, etc.
..
06:30 PM on 10/20/2009
Well & truly stated.
07:25 PM on 10/20/2009
Zack misses that Switzerland pays almost as much for healthcare as the US and that it has a HEAVILY regulated insurance industry that must offer the same standard national insurance policy to all comers at the SAME price (the insurance company gets to set the price, but they must sell to any individual at the same price. No cherry picking by pricing less healthy individuals out of the market). The US health insurance industry will never stand for it. I do agree that everybody must be in the system for it to work properly, but the system in Switzerland is unattainable in the US,

Everybody needs health care, nobody needs health insurance. Single payer, now.
05:44 PM on 10/20/2009
Mandates do not Equal Option...
So you would mandate my 3 healthy hardworking children 20-24 to purchace a health care plan... Health care insurance is quite a bit more expensive than the liabilty insurance they are mandated to purchace for owning a car... One doesn't own a car so he has the option of not purchacing insurance he doesn't actually need... Your mandates will take the money they would invest to acomplish their dreams and goals(owning a car/starting a business)... Money that will not be used to build the economy... You desire this on a grand scale?
The American people may support Public Option but by far they do not support Mandates nor are we buying into the arguments being made for them...

This is what we voted for and supported by our votes - The Obama-Biden Plan-http://change.gov/agenda/health_care_agenda/
•Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.

A Commitment to Fiscal Responsibility: Barack Obama will pay for his $50 - $65 billion health care reform effort by rolling back the Bush tax cuts for Americans earning more than $250,000 per year and retaining the estate tax at its 2009 level.

Mandates are not "Public Option" and Mandates are a Tax On The Hard Working Class Of This Nation.
09:27 PM on 10/20/2009
So, if, heaven forbid, one of your three healthy, hardworking children should have a life event that necessitated a lot of expensive medical treatment, who would pay? What would happen to them if the medical provider refused treatment without guarantee of payment? I think everyones participation in the system is needed for a system to work. I don't think this scheme of forcing us to all be customers of the health insurance cartel is the right answer.
02:52 AM on 10/21/2009
Liabilty car insurance costs them about $35.00 a month. Mandated Health insurance will cost them around $200.00-$600.00 (maybe even more) a month. I have advised them about maintaing a catastrophic policy whch is quite a bit less. The President's plan should include the option to purchace Catostrophic Insurance on the same large pool scale. There is nothing in the Health Insurance Mandate Tax bills that will be of any real use to them unless something catostrophic happens.
It is obvious health care reform is nothing more than a massive tax on the healthy low risk working class people of this country.
09:33 AM on 10/22/2009
Well said
05:14 PM on 10/20/2009
We all want to IMPROVE our health care system. However, Obamacare (in all its manipulative, Orwellian versions) has NOTHING to do with improving our health care system. It's just another power grab, another criminal scam that will further destroy our health care, destroy our economy, steal money from our children and grandchildren, multiply our deficit, and enslave us through lies, manipulation, intimidation and coercion.

Imitating Hugo Chavez, Obama wants to nationalize everything, including our health care system! "Hey, Obama has just nationalized nothing more and nothing less than General Motors. Comrade Obama!" Chavez cheered on Venezuelan TV. He added that he and Cuba's Fidel Castro would now have to work harder just to keep up.
http://www.hacer.org/report/2009/06/us-obamas-red-chorus-investors-business.html

Fortunately, as we can see in the town halls and marches, most Americans have NOT been dumbed down. Most Americans DO NOT WANT to put the power of life and death in Obama’s ACORN-type bureaucracy. They will do whatever necessary to defend themselves, their children and grandchildren from the abomination of Obamacare and socialism/communism.
08:26 AM on 10/21/2009
How far off the mark do you have to get before you are no longer even having the same discussion? Your Senators and Congresseman are responsible for the current health insurance welfare bills, not Obama. BaucuSCARE is the creation of a system for fleecing the American public when they seek services they need to stay alive and healthy. Pl;ease try to stay on task.
09:42 AM on 10/22/2009
Antonio, you seem to be one of the teabaggers! Horribly uninformed! And I am so sick of hearing garbage like yours that has no basis in reality. The Republicans and the Private Insurance Industry are the ones who support a Health Insurance mandate! The health care proposal that then-Senator Obama presented to all of us during his presidential campaign did not support a helath insurance mandate. As he has stated now, his proposal includes the CHOICE of private insurance or public insurance. The public insurance, aka public option, could be administered by a federal agency like Medicare, OR could be administered by a non-profit entity. In either case, it would offer at cost insurance that would be way less expensive than private insurance because it would not have the huge overhead and administrative costs or profit margin the private insurance industry has. The quality would be much higher because the focus would be to provide quality access to health care services, as opposed to the private industry's focus of gaining higher profits by denying coverage for medical care.
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dmsdzinr
Progression wit a twist of sarcasm.
04:24 PM on 10/20/2009
SINGLE PAYER SHOULD have been the solution. Now, we MUST HAVE a MINIMUM of a Strong Public Option included in the Final Bill, otherwise there will be NO HEALTH INSURANCE REFORM at ALL!
Our Government SHOULD be working for the BEST INTEREST of The PEOPLE of America, NOT the Health Insurance Industry!!!
03:55 PM on 10/20/2009
The incentive right now is for individuals to be healthier if they want to qualify for health insurance. Changing the system to where everyone HAD to have insurance would only make people LESS healthy by taking away any motivation they have to try to qualify for cheaper insurance. Why be healthy if I am guaranteed coverage? The insurance companies may WANT them to be healthier, like you say, but how in the world is that going to translate into individuals choosing to be healthier? I'm not getting it. Performance must be tied to results. You can't work backwards from a top-down mandate and expect people change behavior. Unless you're suggesting we should extend government's power not only to force people to buy insurance but to force them to be healthy. That wouldn't fit in the USA that I grew up in.
09:57 AM on 10/22/2009
TheOneShum, that is one of the most nonsensical and ridiculous arguments I have heard today! So in your twisted thinking, you believe that the incentive for people to be healthy is not to have to buy health insurance or find the cheapest insurance available? How on earth did your brain come up with that twisted idea?
The incentive to be healthy should not have anything or much to do with avoiding health insurance or getting cheap insurance!
News flash! The incentive to be healthy is an innate instinct hard wired into every living being on the planet. It goes hand in had with the innate instinct of survival--it is hard wired into our internal make up and that of every living being on the planet. That is why you (well most living beings anyway) avoid rotten food and can sniff out rotted food, because innately one knows that consuming rotted food will cause illness in your body and hence, diminish your survival outcome.
Thanks for the laugh though! I will have to share your joke with my friends, they will get a kick out of it, especially when they know that someone acutally thinks that! hah!
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Maxiesid
03:15 PM on 10/20/2009
We already have a system that allows the insurance companies to abuse and steal from their customers. They accept your payments for years as long as you are healthy and they don't have to pay a cent out... but once you need to actually USE that which you have been paying for, they use little known clauses to deny your claim, and then they can drop you. They insist that you make outrageous copayments, on top of what they are charging you for their 'coverage' Is there ANYONE besides government officials and the wealthy in this country that can honestly say that their insurance has not cost them more than they will ever get back from it? And we have people like the guy writing this article saying that we NEED to be forced to buy from the insurance companies? I will not do it, and I think that most of the country feels the same. (except for conservatives, you know, the ones that prostrate themselves before their masters, the health care conglomerates) We already have an intolerable situation in this country with our 'health care' , reform shouldn't be about making it even worse.
02:00 PM on 10/20/2009
Forcing us to buy an overpriced innefective product like health "insurance" will be the end of the Dems.

It would be like making us buy an overpriced big car that gets terrible mileage, breaks down constantly, and will fail to start when you need it most.

No Thanks..
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jdevienne
librarian
01:55 PM on 10/20/2009
"Turning a blind eye to a mandate as a form of revenge would be cutting of our nose to spite our face"
Indeed, we'd better keep our ear to the ground or we'll be cutting our own throats.