Avoiding Health Insurance

02/28/2017 10:32 am ET Updated Feb 28, 2017

One of the critical goals of the Affordable Care Act (ACA) was to get more people to purchase health insurance. The premise was to get more healthy people to pay premiums for health insurance they would never use; this would allow people with health issues to pay lower premiums for their health insurance. Unfortunately, this business model did not work as many did not participate in this insurance market and, instead, opted to pay a penalty (tax?) that was much less than the premiums and co-pays would have been.

One of the main reasons to opt out of the health insurance requirement was the fact that people could still have access to health care whether they were insured or not. In 1986, the Congress of the United States enacted the Emergency Medical Treatment and Active Labor Act (EMTALA) which imposed obligations on all Medicare participating hospitals to provide emergency services to anyone who presented to their facility. Under EMTALA, the hospital had to provide a medical screening exam to anyone presenting for emergency care. After the medical screening exam, the hospital would then have to provide stabilizing treatment for anyone found to have an emergency medical condition.

For those patients who had a screening exam under EMTALA and were found to have a non-emergency condition, care would still need to be provided as the newly formed physician-patient relationship would have created a “duty of care” for the physician; this would make him subject to the State’s medical malpractice statutes. The physician would have to have continued with the patient’s care so long as a “reasonable physician would have continued to provide care if faced with the same or similar circumstances” — the legal standard needed to avoid a medical malpractice suit.

For years, the emergency department was the default area for primary care for both insured and uninsured patients. Even today, people who have a primary care provider who call for an appointment will first hear a recording advising them to “hang up and call 911 if this is a medical emergency.” This message is predicated on the presumption that lay people will know what a “medical emergency” is. Of course, many people do not know and will call 911 to have various non-emergency conditions checked out. Since emergency room care is very expensive, one of the other key goals of the ACA — to decrease the cost of health care — was not being met.

With the implementation of the Affordable Care Act, it should be no surprise that people who opt out of buying health care insurance, will take advantage of EMTALA to obtain emergency care. This will buy them the time they need to then purchase insurance; there are no penalties for waiting to buy the insurance until the time it is really needed and this was a major short-coming of the ACA.

EMTALA also has short-comings. Although the implementation of EMTALA was meant to insure that all people could have access to care regardless of their ability to pay, the constitutionality of the law has not been addressed by the courts. There is no question that the law forces a “taking” on the hospitals that participate in Medicare. The hospitals forced to evaluate and stabilize patients presenting to the emergency departments must use personal property for this care and there is no provision under EMTALA to reimburse these costs. Under the United States Constitution, if the government imposes a taking on a private entitiy, then just compensation must be provided (Amendment 5 states: “...nor shall private property be taken for a public use, without just compensation.”)

There is no argument that hospitals are providing personal property in caring for patients under EMTALA. Medical equipment, pharmaceuticals, the costs for using the ER, operating rooms, and hospital rooms, and nursing care can be substantial. Some have argued that this type of taking is not the usual citizen to government transfer originally envisioned under the Constitution. However, this government mandated transfer of property of one private entity (the hospital) to another private entity (the patient), was confirmed to be a government taking in Kelo v. City of New London (2005). In this landmark Supreme Court decision, the Court held that this type of transfer of property was a “taking” for “public use” and must be compensated. The government has never compensated for the takings resulting from EMTALA.

The ACA is in a financial crisis as insurance carriers are pulling out of the exchanges and healthy people continue to avoid the requirement to purchase health insurance. The penalty to avoid purchasing insurance is not severe and the risk-benefit analysis clearly comes down on the side of not participating. This decision is made easier when people know they will get medical care no matter what.

E.H. Morreim has recently presented a creative solution to this health care conundrum (Minn. J. L. & Tech, Vol 15:1, 2014). If Congress is serious about the health care insurance mandate, they could force the issue as an act of eminent domain instead of an easily avoided tax. They could “take” people’s money and the “just compensation” would be a health insurance policy that would include enumerated essential health benefits, and the “public use” would be to save a health care system dependent on health care insurance policies and government support through Medicaid and Medicare. Essential to this analysis is to provide fair compensation to the hospitals and providers who are giving of their personal property to take care of these patients.

Kelo also made it clear that the review of an eminent domain action would be under a “rational basis” standard. This is a much easier standard to meet than the Commerce Clause or the Taxing Clause. Under this standard, the government would only need to prove that their purpose was legitimate and the means was not irrational. Requiring people to have health insurance is legitimate and having them pay for it, if they can afford the payments, is rational. Unfortunately, the penalty for not buying health insurance is without teeth and EMTALA as a safety net has further enabled people to not buy health insurance. The resultant crisis of the ACA was entirely predictable.

At this time, it is uncertain how a new health care plan will address these and other issues, but whatever is decided, the hospitals, physicians, and other providers should not be expected to take on an unfair burden in dealing with the costs.

Dr. Weiman’s website is www.medicalmalpracticeandthelaw.com

Dr. Weiman is the author of Medical Malpractice and Fundamental Issues In Health Care Law

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