Mandates Hit the Mainstream
October 21st, 2008 by Jeb Foster
You know the health insurance debate is changing when insurance company executives go on record advocating universal mandates.
That is exactly what Bruce Bodaken, chief executive of Blue Shield of California, told the LA Times recently. In an article published today, the LA Times explains why a mandate has the support of the likes of Bodaken:
The rationale of universal coverage, the norm in other industrialized countries, is that costs are manageable when everyone is covered because the risk pool includes the young and healthy to offset the older and sick.
This is the rationale that persuaded Massachusetts to mandate coverage for all. A similar plan exists in Switzerland, and many are looking to that alpine country’s system as a model of compromise that may make ideological opposites here in America, from Michael Moore to John McCain, come together on a solution. (Click here to read more about the Swiss model.)
In the current system, insurers, who look to cut costs and please their investors (quite reasonably), ‘cherry pick’ the healthiest applicants and leave the unhealthy with either crushingly expensive coverage or none at all. What’s worse, insurers end up spending incredible amounts of time and money–time and money that could be spent on paying for care–on looking for reasons to rescind coverage from their own customers. Some companies even issue bonuses to employees who bounces the greatest number off the rolls.
The social toll of this system is well documented and doesn’t need to be restated here; heartbreaking stories abound.
Another problem with this setup is that the insured end up suffering too: when an uninsured person goes to the ER–the most expensive way to visit the hospital–the cost is passed on to the insured in the form of high overall health care costs and higher taxes.
A universal mandate would turn that de facto subsidy into an actual one–wherein the healthy and wealthy, with the help of the federal government, subsidize the sick and poor. For the currently healthy and wealthy, that may sound like a bad deal, but it isn’t when you consider that if everyone had access to routine and preventative care, there would eventually be fewer and fewer expensive trips to the emergency room, and thus fewer unpaid medical bills to pass on.
Executives like Bodaken now see the importance of mandates, and it’s easy to see why. With popular calls for reform reaching a crescendo–and with people of all ideological stripes considering greater government intervention–insurers are scrambling to be part of the solution, lest they find themselves, um, declined.
