My Individual Mandate

It’s simpler and more effective than the Obamacare individual mandate. And, it is Constitutional.

Rather than forcing people to buy insurance or pay a penalty to the government, here’s my mandate:

If you choose not to purchase insurance and you need medical care, we will expect you to pay for your medical care.

Some will say, “But what about the people who can’t afford insurance?”

I have three responses to those people.

First, check out the insurance rates in Missouri. A $5,000 deductible plan for a family of four runs around $300 a month. That’s not dirt cheap, but it’s affordable for many people. It’s about like a car payment.  If insurance is more expensive where you live, I suggest that you give serious thought as to why (psst…It’s because of your state insurance mandates — maybe you should elect a legislature that will enact affordable mandates).

If someone has new cars, premium channels and a smart phone data package, don’t expect me to feel sorry for them if they say they couldn’t afford insurance.

Second, if we got government out of medical care and insurance, we’d have even cheaper solutions that would make it even more affordable. Government involvement distorts the incentives (e.g. emergency room care mandate) that makes it more expensive.  Without government involvement and restrictions, we’d see more solutions along the lines of $4 Walmart prescriptions.

Third, after that, if you still have some people who can’t afford insurance I’d offer two solutions:

1. Donate money to a charity that provides affordable insurance those folks.

2. If we still must do a government solution, target low-income folks with a medical care credit that they will use to buy health insurance and pay deductibles. Why break the system for everyone else? Just fix it for them.

Update: As I was writing this, it came to my attention that the administration is trying to rebrand its mandate as an “individual responsibility” clause.  I think my mandate better fits that description.

Update 2: I like MikeM’s response in the comments to those who ask, “What about the people who can’t afford insurance?”

If they were expected to pay for their medical care, then they “could not afford not to have insurance.”  They would figure something out.

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9 thoughts on “My Individual Mandate

  1. Isn’t your individual mandate currently how the healthcare system operates? The “public cost” of uninsured are from people declaring bankruptcy. I’d like to know where the taxpayer reimbursement phase comes in to play around that bankruptcy… I’ve not heard many details around that. What is the actual “taxpayer cost”? Surely this is a discrete number that can be found… but all I’ve ever heard are estimates.

    • Thanks for the comment.

      My individual mandate is not how the healthcare system operates. Taxpayers, the insured and those who pay for their medical care pick up the tab for those who don’t pay. That’s the majority of the “public cost”. According to Wikipedia (http://en.wikipedia.org/wiki/Health_care_in_the_United_States) “Public spending accounts for between 45% to 56.1% of U.S. health care spending.”

      The Emergency Medical Treatment Act (http://en.wikipedia.org/wiki/Emergency_Medical_Treatment_and_Active_Labor_Act) is one example of how we don’t expect those without insurance to pay.

      The expectation that you don’t need to have insurance (or have taxpayer subsidized insurance) to get medical care has distorted the incentives and caused some people to decide not buy insurance. This, then increases the cost of insurance and medical care for the rest of us, and also contributes to even more people deciding not to buy insurance.

      This also distorts the incentive to take care of our health, which has contributed to increases in ailments like Type II diabetes, obesity and heart disease and caused increased demand on the medical care system, higher costs, higher insurance rates and even more folks deciding not to buy insurance.

      If the health care system operated on my individual mandate, it would alleviate the incentive distortions described above and provide a stronger natural incentive than a government penalty for folks to buy insurance, make better medical care decisions (e.g. dr. office visit instead of emergency room visit) and take care of their health — all of which lowers medical and insurance costs.

      Here’s an interesting article on health care bankruptcies (http://www.realclearmarkets.com/articles/2009/07/30/the_medical_bankruptcy_myth_97335.html). Compared to the actual direct public spending on health care, it’s probably small dollars.

  2. The whole idea of insurance is that it’s more “unaffordable” for an individual to pay for an unexpected medical catastrophe from his own individual resources than to share this risk with others. So, the real reply to those who ask, “What about the people who can’t afford insurance?” is that these people can’t afford to not have insurance.

    Prior to the federal government’s intrusion into health care – an area where it has no constitutional authority – people were not refused health care. Now, people who chose not to pay (and for virtually all, it’s a choice between paying for health care versus something else) night not get “non-essential” services like cosmetic surgery, sex change operations, birth control, etc. and they might have to accept a cheaper treatment that’s less effective, but that’s how the markets operate for virtually every other good and service. When we tell people that they don’t have to pay and they can get all the health care they want and don’t have to chose between treatment options, everyone will want the double portion filet mignon and lobster dinner for every meal – even if they’re not hungry. The individual perceives no downside to demanding more quantity and better quality and, by G-d, they want it NOW! But there is a downside for society as our resources are wasted on resources that would be used elsewhere under normal market conditions, but who wants to be the “sucker” paying into such a system, but getting less out of it than everybody else? One doesn’t have to presume that people would abuse the system in such a scenario. Medicaid ( and to an extent Medicare) beneficiaries have been doing this for decades. Like all goods and services, health care has been – and always will be – rationed. It’s just a question of who does the rationing. Under a free market system, care is rationed based on prices. Individuals chose whether or not to get care and what care to get. Under ObamaCare, the government decides who gets care and what care they can or cannot get. The liberals like this because it’s a carrot they use to buy votes.

    • “So, the real reply to those who ask, “What about the people who can’t afford insurance?” is that these people can’t afford to not have insurance.”

      Well-stated.

      I agree with the rest. Though I do have one comment re: this statement: “everyone will want the double portion filet mignon and lobster dinner for every meal”

      It doesn’t take even take everyone wanting a double portion to wreck the system. It only takes a few.

      • I agree, but they system can absorb some low, finite percentage of parasites. The problem lies in the fact that it is human nature to not want to get taken advantage of. Therefore, because everyone knows that everyone else will be gaming the system, everyone joins in so as to avoid being the odd man out in this game of musical chairs.

  3. Mike M says:

    “The whole idea of insurance is that it’s more “unaffordable” for an individual to pay for an unexpected medical catastrophe from his own individual resources than to share this risk with others.”

    Excuse me Mike, insurance is the transfer of risk to an insurer [entity] for a consideration.

  4. I agree with this definition technically. However, from a practical standpoint, health care insurance has involved significantly (statistically speaking) large numbers of insurance buyers. Of course, this is not necessary as an insurance seller might be willing to sell insurance to an individual or small pool of insureds if the insurer felt that its rewards outweighed the risks it faced. I don’t know that this has ever been the case with health insurance as providers of health insurance want a large enough sample of insureds such that they can spread the premiums necessary to cover outliers amongst many folks. My understanding of health insurance is that it grew out of insurance offered for accidents in railroad or steamship mishaps.

    But your definition leads to another important point. For events that are 100% (or almost 100%) certain, what’s the point of an individual (Mr. Smith) transferring his risk to an insurer. Let’s say that treatment of “the event” costs $100. With administrative costs and the desire for profit, insurance companies will charge more that $100 to assume the risk. But why would Smith want to pay more than $100 (and give up the use of that $100 while waiting for the event) when he could pay $100? But that’s how we’ve redefined health insurance in America – from a vehicle used to pool risk (“catastrophic” health insurance) to a vehicle of social engineering where the wealth of those who produce more is transferred to those who produce less in the form of medical care.

  5. Seth, your update #2 – “If they were expected to pay for their medical care….” – was spot on and defines the crux of the matter. To borrow from Charles Sykes’ recent book, we have become a “nation of moochers” and there are more than a few – encouraged by the liberals’ claim that health care is a right – who believe that the are entitled to health care whether or not they are willing to pay for it. But someone has to pay for all these goodies that the government doles out and like the Iron Lady explained, “the problem with socialism is that you eventually run out of other people’s money.” It’s ironic that Obama has rebranded the individual mandate as the “personal responsibility clause” when ObamaCare is all about excusing people from their personal responsibility and forcing others to shoulder it.

  6. Pingback: “I promise a chicken in every pot (chicken not included)” | Our Dinner Table

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