• Stools need more than two legs

    Yesterday I got into a discussion with an executive from a large and well known insurance company.  He chased me down as I was getting into my car.  He was arguing – vehemently – that the individual mandate was unconstitutional and that it was a government takeover of health care and that it would ruin private insurance companies like his.


    It’s getting hard for a wonk these days.  Lately, I’ve been spending so much time correcting arguments for one side or another that I can’t make my own.  So, please, listen up. If you are affiliated with a private insurance company – if you work for one, benefit from one, or run one – then you are FOR the individual mandate.

    As we have explained over and over and over, health care reform is like a three-legged stool.  If you like the regulations such as no lifetime limits, no exclusions for pre-existing conditions, and no increased cost because of such conditions, then great.  You got them.  Even Republicans seem to like these, so they are uncontested.  That’s leg one.

    “But wait!” say the insurance companies.  If you make it so we have to give insurance to everyone, even if they are sick, and we can’t charge them more, then people will game the system.  They won’t buy insurance while they are healthy and then only get it when they are sick.  That will kill the insurance companies.

    They’re right.  So what you need to do is make everyone buy insurance so this doesn’t happen.  That’s why you have the mandate.  That’s leg two.

    “But wait!” say the people.  If you make it so we have to buy insurance, then you might force us to buy something we can’t afford.  They’re right.  That’s why we have subsidies to help many people buy insurance.  That’s leg three.

    And that’s PPACA.

    You can hate the whole thing.  You can look at this and sigh over it’s complicated structure and waste and long for a single-payer system.  You can hate insurance completely and want the whole thing gone.  But what you can’t do is remove one leg and think that the stool won’t topple.  And, if you’re an insurance company, you absolutely, positively can’t just remove the second leg.  That’s the leg we put in just for you.  From the WSJ:

    Insurance companies fear that if they face new mandates but the law fails to bring millions of healthy uninsured Americans into the system, they could wind up with a relatively unhealthy customer base.
    “It’s absolutely the worst possible outcome,” one former White House official said.

    (h/t Igor Volsky for the pic)

    • The question is still out though. The Supreme Court will rule on its constitutionality not on its legislative merits (which was the failure of the judge in Michigan). While the third leg is needed for the stool in your analysis, the Supreme Court is only looking at the third leg …. not the entire stool.
      I believe as well, that if the individual mandate is ruled unconstitutional the entirety of PPACA will be thrown out because there is no clause that protects the bill. I heard that from the Florida Attorney General …. I have been unable to verify it.

    • As with other comments, I have to point out that being ‘right’ or ‘effective’ doesn’t mean a thing is Constitutional. Perhaps we need an article explaining how the mandate is not Corporatist/Fascist. Supposedly WWII was fought to defeat such systems. That memory will forever linger as an irritant under a mandate. You may not be able to write such without stretching the truth, as the courts have decided that such arguments are valid enough to consider. I don’t know.

      People don’t like the idea of being compelled to pay taxes to a private corporation. That is a reasonable framing of the Mandate.

      The ‘good’ thing about all this is that if the court fights can be drawn out until people start enjoying the benefits of this reform, then if/when the law is struck down, it is more likely to be replaced by some form of single payer system, no?

    • They’re right. So what you need to do is make everyone buy insurance so this doesn’t happen. That’s why you have the mandate. That’s leg two.

      Is there mechanism in the bill to prevent a person form buying a very high deductible plan and the switching to a low plan after diagnosis of an expensive long term disease.

      • @Floccina – That could be why high deductible plans are not available in exchanges except for the very young (under 30) and those who meet the financial hardship criterion.

    • I am willing to bet that this insurance executive is a pretty hard core conservative. I have known many insurance executives, both at my company and beyond, and the best predictor of whether they like PPACA is ideology, NOT a dispassionate analysis of business interests. It goes against the stereotype of executives as only having business interests in mind, but it has been my experience. This holds both ways, for and against.