Insurance mandate: Should healthy people pay for irresponsible sick people?

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Mar 14, 2010
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Many Democrats are arguing that an insurance mandate is necessary so that everyone will be forced to get health insurance. This is for the sake of cost sharing; nowadays, for instance, many consumers are looking to tighten their belts and find savings everywhere they can. One bet many poor healthy people have made is to not get health insurance because they won't need it enough to justify the cost. Insurance companies lose many of their healthy subscribers, so they lose profit; as a result, those who are too sick remain on the plan, but for the company to offset its losses, it has to increase premiums. This is probably what caused the recent 39% premium increase Anthem imposed, in California. A mandate will prevent the possibility of this happening in the future; people will have to get insurance even if it would not be economically rational, and insurance companies get more profit.

I have two main disagreements with this:
  • Healthy people should not have to pay for sick people directly because sickness is often caused by poor lifestyle behaviors. If some people make poor decisions about their health, others (the healthy who would be forced to get insurance for cost-sharing) should not be forced to pay for it. Call me heartless, but I think if you eat so much that you're 300 pounds and need coronary bypass surgery or something, you should be the one to pay for it. It's basic personal responsibility.
  • The government has no imperative to force citizens to buy something simply so that an industry can make more profit. Without the mandate, the people in need will disproportionately desire health insurance more - but that's how it is for every single other good and service the market provides. It's not unfair to the companies, they're voluntarily providing a service (hopefully) and others are voluntarily choosing to purchase that service or not.

Firstly, the healthy should not have to pay for those who make bad decisions and make themselves sick or require expensive surgery or drugs. Of course, there are many ailments which are not caused by negligence, but many are. For instance, eating at McDonalds every other day, or taking the elevator up to the 2nd floor, or using a motorized lawn mower you ride on, or not exercising, etc. Recent advances in technology and manufacturing have increased our ability to stay inactive or to buy cheap, unhealthy goods. You can see the effects of thsese things today:

Obesity:
USObesityRate1960-2004.gif

2/3 of all Americans are overweight.
1/3 of all Americans are obese.
American Health Rankings said:
In 2018, the cost of obesity at a national level is projected to be $1,425 per person.
Source
($1425 per person * ~300 million people = $427,500 million, or $427.5 billion)

Diabetes:
MedicineNet said:
If nothing is done, the number of Americans with diabetes will nearly double in the next 25 years and spending on the disease will nearly triple, a new study shows. ... By 2034, as many as 44 million Americans will have diabetes, up from 23 million today, according to the new projections, published in the November issue of the American Diabetes Association journal Diabetes Care.

The cost of caring for diabetes patients is projected to rise from $113 billion to $336 annually, before adjusting for inflation.
Source
Medical Journal Source

Alcoholism:
CDC said:
  • Percent of adults who were current regular drinkers (at least 12 drinks in the past year): 50
  • Number of alcoholic liver disease deaths: 13,050
  • Number of alcohol-induced deaths, excluding accidents and homicides: 22,073
Source

The bottom line is that poor lifestyle choices are a significant cause of much of our extravagant health care spending. These poor choices should not be subsidized by unrelated third-parties (the healthy) - it creates a moral hazard. People are more likely to make bad decisions if they know others would pay for potential consequences.

Secondly, even if the lack of a mandate gives a company greater cost pressures, that's no reason to interfere with the market simply for the sake of providing the company more profit. We don't force corporations to operate at a loss; why should we force some consumers to operate at a loss (be forced to buy insurance)? This would simply be a giveaway to the insurance companies. They're already making billions of dollars in profits; why should the government interfere simply to give them more, hurting healthy citizens in the process?

Of course, there is one caveat applicable to both of these, which is that some sicknesses are not caused by risky behaviors. It would be quite difficult to fairly and consistently separate those responsible, and given that reducing costs is one of the main reasons for health reform, I don't see a solution, other than the following:

There is also the idea that, whether or not one is responsible for one's ailment, the state nevertheless has a duty to help out financially. While this may have philosophical merit, I don't think it's workable here, given that personal freedom is supposed to be one of the main principles of the country, and that cost control is absolutely necessary.

One last argument for the mandate is that some will buy health insurance only when they get sick, decreasing the insurance industry's profits if they decide to carry you. A possible counter is that the firms may be free to deny your insurance application, which would incentivise getting insurance before you need it, for the sake of cost-sharing among the healthy.

What do you think?
 
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There is also the idea that, whether or not one is responsible for one's ailment, the state nevertheless has a duty to help out financially. While this may have philosophical merit, I don't think it's workable here.....
No doubt....seeing-as-how others have tried....and, failed (miserably), right??

:rolleyes:

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Sorry.....your agenda has BEEN Absolute-Free!!!!

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(...And, we've got The Word of an in$urance-indu$try's PAID-LIAR, on that!!! :p )​
 
No doubt....seeing-as-how others have tried....and, failed (miserably), right?​

The only reason I don't think it's workable is because the public option is unfortunately close to dead in the legislature, or so it appears. A public option of sorts would ideally be the best sort of thing, so that health care would be absolutely affordable to everyone, but given that it's pretty much dead, I'm concerned about the effects of the individual mandate on the relative affordability of health care costs, given the usual difference in responsibility between the healthy and sick.​
 
The only reason I don't think it's workable is because the public option is unfortunately close to dead in the legislature, or so it appears. A public option of sorts would ideally be the best sort of thing, so that health care would be absolutely affordable to everyone, but given that it's pretty much dead, I'm concerned about the effects of the individual mandate on the relative affordability of health care costs, given the usual difference in responsibility between the healthy and sick.

The only reason the public option is dead is that we have gutless politicians who are greedy instead of being courageous.
 
Why do the libs and dems really belive the govt will be able to control this monster once it is created.

They have such a terrible record of handling other large entitlements. It's a joke.
 
Why do the libs and dems really belive the govt will be able to control this monster once it is created.

They have such a terrible record of handling other large entitlements. It's a joke.
Probably because of estimates that the bill actually will have a beneficial effect on the budget in the long run. The problem is that there are significant start-up costs.

I think the bill in general is a good idea, but the mandate goes completely against the spirit of free exchange for consumers, which makes it a problem.
 
The estimates on the budget are a load of horse crap. 6 years of spending and 10 years of collecting money. It's gonna look good on paper.. but in reality it is a bust!

There's no defense that can explain that away. That's exactly what the plan is. If the bill was based on 10 yrs spending and collecting, which would be the correct way, it would not be in Obama's guide lines.

These folks in Washington have a superiority complex. They think they are Lords and Ladies and are trying to dicate to us.

They forgot who they work for.
 
The estimates on the budget are a load of horse crap. 6 years of spending and 10 years of collecting money. It's gonna look good on paper.. but in reality it is a bust!
That's a good point. So perhaps we should stop wasting so much money on other programs so we can help Americans have more access to health care.
Maybe a good place to start would be here:
us_vs_world.gif
 
This premise, healthy people mandated to pay for the sick and elderly is precisely the the same original concept as younger workers paying for the retired. That system began with approximately 16 workers contributing to "the fund" for every retiree....now, if memory serves, it's less than 2 to 1. The system? Social Security, and it is, for all intents and purposes, absolutely broken, broke, unfunded, and unsustainable without further redistributing wealth.

How is Democrat proposed HCR going to wind up any differently?
 
This premise, healthy people mandated to pay for the sick and elderly is precisely the the same original concept as younger workers paying for the retired. That system began with approximately 16 workers contributing to "the fund" for every retiree....now, if memory serves, it's less than 2 to 1. The system? Social Security, and it is, for all intents and purposes, absolutely broken, broke, unfunded, and unsustainable without further redistributing wealth.

How is Democrat proposed HCR going to wind up any differently?
Well, for SS, there's an easy enough solution, although the top 6% may not be all that happy with it. Simply eliminate the SS taxable income cap and there won't be a problem.
You are aware that, up until now, SS has always been paid in much more than it's dished out, right?
I wouldn't call a $2.4 trillion surplus "absolutely broken, broke, unfunded, and unsustainable."
As you know, Social Security taxes are levied on earnings up to a maximum level that is adjusted each year to keep pace with average wages. In 2009, this payroll tax cap is set at $106,800 dollars, and roughly 6 percent of the population has earnings above the cap.

Due to growing income inequality, the share of earnings above the cap has risen from 10 percent in 1982 to over 16 percent in 2006. This is because incomes have grown strongly at the top while middle incomes have stagnated.

This trend is expected to continue, meaning that a growing share of earnings will remain outside the tax base.

The cap also means that higher-income individuals pay a smaller share of their income in Social Security taxes than middle-class employees. Including the employee and employer shares of Social Security and Medicare taxes, earners in the middle fifth of the income distribution pay an average effective payroll tax of about 11 percent. In contrast, the top 1 percent of earners pay just 1.5 percent on average.
Let me turn now to different options for making adjustments to the cap.

According to the Social Security Administration, fully eliminating the cap on taxable earnings would be sufficient to fully close the projected shortfall.

Source
But there's no easy way to simply fund health care treatments for the sick like there is for SS.
 
"up until now" is all that matters. Our population is getting older and workers and jobs are becoming more scarce. Do you believe this trend is going to magically reverse?

So, essentially what you are suggesting will "save" Social Security, is further wealth redistribution?
 
"up until now" is all that matters. Our population is getting older and workers and jobs are becoming more scarce. Do you believe this trend is going to magically reverse?

So, essentially what you are suggesting will "save" Social Security, is further wealth redistribution?
Well, it's eliminating an exception to the current system. Yes, it is close to wealth redistribution, but keep in mind that payroll taxes simply result in decreased income; they will still be receiving very significant income, especially if they're in that top 6%.

The trend is not going to reverse, obviously, but many long-term estimates say that the system will, indeed, remain sound, even when factoring in an older population.

For the record, I happen to believe that social security is a terrible idea, for other reasons, but still, this elimination of the cap is one of the proposed solutions to the program's long-term solvency.
 
Well, it's eliminating an exception to the current system. Yes, it is close to wealth redistribution, but keep in mind that payroll taxes simply result in decreased income; they will still be receiving very significant income, especially if they're in that top 6%.

The trend is not going to reverse, obviously, but many long-term estimates say that the system will, indeed, remain sound, even when factoring in an older population.

For the record, I happen to believe that social security is a terrible idea, for other reasons, but still, this elimination of the cap is one of the proposed solutions to the program's long-term solvency.

LOL, I'm replying to you on the other forum...I'm too lazy to do it twice.:)
 
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Isn't the whole concept of insurance based on the idea that benefits are averaged out? How does a government program differ from a private one?
 
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