Jaan Sidorov of the Disease Management Care Blog has done an excellent job with the most recent edition of the Cavalcade of Risk. I was particularly drawn to an article by Jason Shafrin about the financial logistics that would go along with repealing the individual mandate portion of the PPACA.
I’ve long been in support of the mandate – not because I believe the government should be in the business of telling us what we have to buy, but because I don’t see a viable alternative that would allow for both guaranteed issue (and community rated) health insurance and reasonably affordable premiums. We could continue with things the way they are now – no mandate that people purchase coverage, and no requirement that health insurance carriers accept applicants with pre-existing conditions. But that comes with it’s own list of problems, mainly the fact that finding affordable coverage if you have pre-existing conditions is difficult (and was impossible in some states before the temporary high risk pools were enacted by the PPACA). The problems encountered by people with pre-existing conditions were often considered unfair, even though the system made sense from a business perspective of managing risk. So the government took it upon themselves to try to fix the problem. The idea of guaranteed issue health insurance has widespread public support. But the nitty gritty details that have to go hand-in-hand with that solution (namely, a way to make sure that healthy people as well as sick people are paying into the system in order to spread the cost of treating the sick people) haven’t been nearly as popular. A lot of people would like to see the mandate repealed, while keeping the prospect of guaranteed issue health insurance intact. As Jason pointed out with a very simple example, that would make for some very expensive health insurance premiums.
As I’ve mentioned before, health care costs are what drive health insurance premiums. And until we figure out how to reduce the amount we spend on health care, health insurance premiums will continue to rise. But they will rise even faster if we require health insurance carriers to accept all applicants without imposing some sort of system that eliminates the possibility for people to wait until they are sick to purchase coverage.
