The Individual Mandate And Catastrophic Coverage

Randy Barnett looks at the dubious press coverage of catastrophic coverage. His intro:

One of the myths of the Affordable Care Act is that it designed to address the costs imposed on the health care system by uninsured healthy younger people who may incur unexpectedly high medical costs from, say, being hit by a bus, and who then shift these costs to those who have insurance.  As I have discussed previously, several commentators have suggested that Justice Kennedy could uphold the mandate on the limited theory that the mandate uniquely requires individuals to pay to cover their own “actuarial risk”—i.e., the chance that they will suffer an unexpected, catastrophic healthcare cost that they could not pay for out of pocket.

Among the flaws that I identified with this purportedly narrow defense of the mandate is that it is factually inaccurate:  Obamacare does not simply make people buy catastrophic coverage that would cover their own unaffordable risks at a price that reflects their actuarial risk;  instead, as several of the Justices recognized,  it makes them buy comprehensive policies for a wide range of services they don’t need in order to subsidize the law’s other costly requirements, at a price in excess of the actuarial risk that they pose to the system.  Rather than being a scheme to insure against the risk posed by younger persons, the Affordable Care Act creates a system of a government-mandated privately-administered redistribution of wealth from the young and healthy to older baby boomers.

Well, yes - it is a leap to insist that everyone is, in their lifetime, a participant in the market for medical care and therefore must buy coverage for mental health, substance abuse, contraceptive care, and all sorts of things people might address in other ways (e.g., not abusing substances).

Comments

[Jane]

There is a federal law that requires hospitals to treat anyone who shows up. Repeal that law. The rest is easy.

[reliapundit]

obamacare transfers young people's money to insurance companies who need it to pay for the care of boomers.

and it limits the amount it will spend on senior/medicare patients via death panels.

it neither makes care more available or more affordable.

[BuddyPC]

This is what happened to me in MA.
In my early 20s, I did the math and realized I didn't need to pay into the company health plan every week, dropped out, took out catastrophic coverage and paid upfront for all doctors visits, and watched my savings account grow, Fast forward to spring 2007, following the passage of MA Univ Health Control, when I get a notice from Ins. that my coverage would not be renewed since it was no longer in compliance with MA regulation.

[Neo]

"Will no one rid me of this turbulent health care debate ?"

[Danube of Thought]

Scalia nailed it: if you define the market as broadly as "health care," you sweep in millions of people who will never seek many of the services they are compelled to insure thsemselves for.

[Clarice]

Niters. DoT XOXOXO

[Minimalist Poster]

Jane, you're referring to the Emergency Medical Treatment and Active Labor Act (EMTALA). Essentially it requires hospitals that want to receive Medicare payments to "stabilize" anyone who presents in an emergency condition regardless of citizenship, legal status or ability to pay. The last time I saw the numbers, 44% of hospital revenue was from Medicare, so most hospitals comply despite the fact that they're not compensated for that care . . .

http://en.wikipedia.org/wiki/EMTALA

[Jane]

That's the one MP. Thanks.

[megapotamus]

In large measure it is the OTHER mandates that have inflicted so-called medical inflation upon us. But parity, the requirement that mental health be dealt with equivalently with, say, leukemia has been a state level phenomenon, possibly pushed by legitimate voter/consumer demand but somehow the voices trumpeting those needs are mouthpieces for professional organizations and pharma giants. Weird. Once the head-shrinkers are mandated in we have chiropractors, massage therapists.... hey, why not aroma therapists? Not that I necessarily denounce the salubrious nature of any of these practices but their application is essentially infinite. This, while annual caps on total care costs are banned and lifetime caps to go with them. With this plague of mandates we introduce infinite demand onto a finite supply. Either the denominator is zero or the numerator is googol-plex. Either way, no es bueno. Check my link for how Charlie Sheen showed us the way, here.

[Tully]

Barnett NAILS it.

The push for universal coverage with universal acceptance and level premiums has ALWAYS been about capturing money from the healthy uninsured, who are usually young and have more pressing priorities for their income. Like eating, and paying the bills.

17% of the populace is uninsured, yet uncompensated care accounts for only 3% of total health care costs. If the uninsured can be dragged into the system, that provides a pool of "new" money that's more than five times the actuarial cost of the newly insured.