Tuesday, March 1, 2011

Mandating Behavior

While reading USAToday a while ago, I ran across an editorial cartoon that was talking about the new healthcare law and in particular it was addressing the relevance of the health insurance mandate. In the cartoon it makes the point that under our current system an individual can go to the emergency room, receive care and many not have to pay for the care they receive. Because hospitals are required to provide care, regardless of ability to pay, the cartoon argued that without the health insurance mandate, others are required to pay for someone’s health care if they go to the emergency room and do not pay. In addition to this cartoon, I have heard this argument several times previously from different sources. While I would agree that our system of providing care to people regardless of ability to pay induces a moral hazard for people to over-consume health care, I think that it is important to address this particular point.
The point is to make what seems to me to be a relatively obvious objection to the previous line of reasoning. To start the reasoning for the justification for mandating people purchase health insurance you have to make the initial statement: “I am, or society is, unwilling to let people go without necessary medical care.” Based on this line of reasoning, we have mandated that hospitals must provide people with health care, regardless of ability to pay. The second line of reasoning goes: “Because I am unwilling to let you go without medical care, you have a strong incentive to over consume healthcare, or not pay for healthcare. “ Finally, the argument goes: “Because you will not bear the full cost of your care, and I will bear some of the cost of your care, I am justified in dictating what you purchase or consume. (Like purchasing health insurance)” However, the problems with this line or reasoning should be obvious. Basically it is saying, because I feel one way that gives me the right to control you in some other way. So it is saying that the person doing the controlling is justified in controlling another person because of how they feel. How can the person being controlled prevent this in any way? They cannot. What limits does this place on the controlling person? None. Along this same line of reasoning, I could say that blonde hair annoys me; therefore I have the right to force every blonde person to dye their hair.
Based on the objection that individuals do not completely pay for their cost of health care, due to the emergency room, the obvious answer to me is to make them pay. Instead of mandating that everyone purchase insurance, we should eliminate the requirement that individuals admitted to the emergency room do not have to pay for their care. For those that cannot pay, they can attend private charity driven hospitals that would emerge once we have eliminated the distortion causing government policies.
In addition to the point I just made, I would like to make a couple more. First, knowing the problem that individuals do not cover the full cost of their health care, the policies we enact should work toward fixing this problem. However, we seem to be moving in the opposite direction. For example, the recent health care legislation mandated health insurance be provided through a process of community rating, where by healthy people subsidize the sick. We also moved to provide health insurance subsidizes, which shift the cost to tax payers. Secondly, there has been a lot of talk recently that the United States is the only industrialized county that does not have universal health care. However, what does the mandate that emergency rooms provide care regardless of ability to pay result in? It results in universal access to health care. Proponents of increased government involvement in health care like to ignore (perhaps they don’t understand?) this point. I personally don’t think a universal health care system is necessarily a good thing. However, for those that do, they don’t seem to realize that we already have it, they just don’t like it.