If the devil is in the details, we got the motherlode this past week as to how the most incendiary part of President Obama's health reform will actually work when it launches next January.
The Department of Health and Human Services issued lengthy rules on the controversial individual mandate requiring uninsured Americans to purchase a health plan. The IRS followed with nearly as lengthy a set of rules specifying who is eligible for subsidies for those purchases and who pays penalties when they refuse. In what critics will consider an Orwellian flourish, both federal agencies refer to these penalties as "shared responsibility payments" -- even though the Supreme Court, in its upholding of the mandate, plainly referred to them as what they are: a tax.
The two sets of rulings represent a sort of good cop, bad cop routine from the Obama administration. The bulk of the HHS rules defines individual outs for the mandate, identifying 11 different types of uninsured Americans who will be exempt from the de facto tax, ranging from sudden financial impairment to genuine religious objection to medical care. The IRS rules are all bright hard lines about who has to pay, when, and how.
The major media, echoing criticism by Obamacare's agitators from the Left, seized on the stinginess of the IRS rules regarding subsidies and penalties for family members of people covered by their employers, or what they call the "family glitch." The glitch is technically real, but statistically remote, and will affect almost no one in the real world, but it does make for good inflammatory headlines.
The much bigger story are those 11 classes of exceptions -- because they will ultimately affect far greater numbers of people. After all those qualifying for exceptions are counted up, according to government estimates, only 2 percent of the entire population will end up uninsured and exposed to the tax.
If all those exceptions were not the administration trying to do the right thing, then at least they represent an attempt to accommodate critics about the mandate. Flush with political capital from the reelection, the president may be strong-arming Congress on gun control, the debt ceiling, and other matters. But those at HHS working to implement health reform are clearly mindful of, if not outright cowed by, the political rage over the mandate and its near-death experience in the Supreme Court.
Good luck with that. No amount of flexibility, reasonableness or nuance in the implementation of Obamacare will mollify its loudest critics on the right. Their hatred of the mandate is steeped in ideology about government overreach, galvanized by now chronic resentment over the way President Obama and the Democrats rammed the law through Congress in 2010, and burnished by collective unconscious anxiety about a bitter irony of the individual mandate: it's their idea.
The Obamacare haters may fulminate against the individual mandate as a destruction of liberty and, with its cross-subsidies for the working poor, an expansion of the nanny state. Making people carry health insurance -- rather than gambling on their health and then showing up in the emergency room when their luck turns -- is a call to personal responsibility. But as I learned after pointing this out in The New York Times before the election, the real fuel for their fury is the consistency of the mandate with their own values. Had I been in the midst of a psychotic break when I noted that the individual mandate was formulated at the Heritage Foundation and championed by Congressional Republicans, I would have been laughed at or ignored. Instead, I hit a raw nerve and was pilloried by my then-colleagues at the American Enterprise Institute and a dozen conservative bloggers, including Senator Jim DeMint (R-SC) who now runs Heritage.
So let's be plain: making people obtain and maintain health insurance is not the nanny state; it is grow-up time. The nanny state is what we have today, prior to full implementation of Obamacare, and what we have had since the 1986 passage of the Emergency Medical Treatment and Active Labor Act. EMTALA is the reason the emergency room has to take you in, insured or not, flush or broke. The law does not give the uninsured access to the full range of health care in this country, but it does mean the hospital cannot throw them out in the street if they are dying or delivering a baby.
Who pays for it? The rest of us, when we pay our hospital bills, directly through co-pays and indirectly through insurance, and when we or our employers pay for the insurance itself -- all of it marked up to cover the cost of those who are too poor, too sick, or too reckless to buy their own insurance. This is why the Supreme Court overwrote the administration's own sheepish legal defense of Obamacare, upholding the mandate and correctly identifying the "shared responsibility payment" as a tax for uninsured Americans' 24/7 access to the U.S. emergency health care system.
EMTALA is one of the reasons hospitals famously charge $10 for an aspirin, and one more reason we all pay so much for health insurance. It is the costliest patch on the crazy quilt of our voluntary system, along with countless other patches ranging from public health clinics and bad debt, to physician charity care and drug company patient assistance programs. We are all paying for this nanny state care today -- invisibly, mindlessly, and with maximum inefficiency -- through cross-subsidies that pervade hospital and doctor bills, and drug prices. Obamacare is an attempt to unwind this subterranean nanny state and enfranchise the uninsured in the system before they become sick.
While the new HHS rules seek to exempt from the mandate people with true hardships or religious objections to medical care, the administration can and should match this flexibility with more muscle and cajole people to obtain health insurance by taking away their single best reason not to: by repealing EMTALA. Obamacare is systematically removing barriers to coverage -- by outlawing pre-existing conditions exclusions, enabling enrollment through insurance exchanges, expanding Medicaid (except in states with governors who put ideology ahead of the needs of their poor and uninsured), and subsidizing coverage up to 400 percent of the federal poverty level. These carrots will work best at the end of a stick. As people run out of reasons they cannot carry their own health insurance, the best way to get them to do so is by un-doing the current nanny state as quickly as possible.
With EMTALA out-of-the-way, hospitals will be still be free to treat the uninsured -- and those who do not qualify for one of the eleven exceptions -- for free. More likely, they will enroll them on the spot, as part of the ER triage and admissions process, in an exchange-based health plan -- another great way to increase participation. As part of an EMTALA repeal, Congress should enable "lookback" provisions for those health plans stuck with people who do not obtain insurance until their proverbial house is on fire.
The media who skipped over the bigger story in last week's HHS and IRS rules, and instead went straight to the incendiary story at the long end of the demographic tail, will no doubt report the EMTALA repeal far and wide. And let's hope they do. Those who still do not want to buy coverage, even when it is finally available to them -- with subsidies for many and insurers no longer able to exclude anyone for a prior illness -- will be free to die in the street in front of the hospital, unmolested by the nanny state. Don't tread on me indeed.
Repealing EMTALA would address another criticism of Obamacare from across the political spectrum. The "shared responsibility payments," i.e., taxes are too low to be effective -- far lower than the cost of insurance -- which will only embolden the refuseniks. If the political commitment of the "live free or die" crowd does not waver even when the chest pain starts, the hospital will be happy to accept cash, check or credit card. As for Christian Scientists, who take their right to refuse medical care so seriously they have gone to prison for letting their own children die of treatable illness, the repeal of EMTALA will not matter. They and others with religious objections to medical care are included as one of the 11 types of exceptions. The other 10 types suffer from various forms of financial hardship, with one group's exacerbated by residence in a state with a refusenik Governor. The new HHS rules spell out how to legitimize and document each type; for them, EMTALA should still stand and those red states and its hospitals can continue to operate the classical form of the nanny state.
Obamacare is an enormous work-in-progress, every element of its implementation under immense scrutiny and political pressure. In the horse-trading on Capitol Hill that will accompany any amendments to the law, the Obama administration can and should use the repeal of EMTALA as the best way to call the Republicans' bluff on the whole thing: we want to increase participation in the plan and you don't want a nanny state -- so let's accomplish both by repealing EMTALA and let people decide for themselves.
As we implement Obamacare -- using subsidies, employer requirements, individual mandates and "shared responsibility payments" to prod people into getting insurance coverage -- EMTALA remains an obstacle, a contaminating artifact from a non-system we are trying to rationalize. People have been conditioned for decades to know the ER is there and has to take them in regardless -- hence Mitt Romney's backpedaling, right before losing the election, to EMTALA as a failsafe for his promised repeal of Obamacare.
Governor Romney dared take so absurd a position because he knows, like most Americans, that the pre-Obamacare nanny state allows anyone to free-ride on everyone who participates in the system -- not buying insurance, rolling the dice, then running to the ER when something goes wrong. Because eventually, something will go wrong. The architects of health reform in most forms, along with the Supreme Court, recognize that we are all mortal beings and inhabit bodies that will eventually fail.
This is why we attempted decades ago to compensate for a broken insurance system by forcing hospitals to stabilize those who are suddenly ill or about to have a baby -- regardless of their libertarian or religious bravado the day before. We are all paying, directly or indirectly, sooner or later, to take care of each other.
In American life, there are two certainties: hospital life support and taxes.