Philadelphia Reflections

Children, Playing With Matches

And now, after the President has signed a bill into law to be effective January 1, 2014, we have mandatory health insurance. Really? The word 'mandatory' is not easily found in a search engine search of the 450 sections of the Affordable Care Act, except for mandatory coding and reporting requirements, and perhaps some oblique references to what might possibly be required of newly mandated insurance enrollees, in case anyone is mandated. The operative term used in the statute to imply universal coverage is "Required minimum coverage", mostly deferred employer group plans for at least a year, particularly for those with more than 100 (formerly 50) full-time employees.

It is unclear what the Supreme Court decision limiting penalties to a small tax will do to this group, who temporarily (?) make up the largest proportion of people affected. They are also affected by more severe penalties for noncompliance, a dubious application of equal justice. What is mandated right now is that everyone who does not belong to a group plan, and who is not specifically excluded, must pay a tax if not insured. Shortly after the law was enacted, the U.S. Supreme Court specified the tax must be small, otherwise, it would be coercive. Two opposite suppositions are possible: by the time the large-employer deferment expires, either the burdensome penalties will be reduced, or else the present uproar will seem trivial by comparison with what will come next year. Seen from a distance, this law looks as though it was written with large employer groups in mind, and everything else was patchwork. If we discover later the patchwork is the whole system, the Affordable Care Act then assumes quite a different character from universal coverage, and probably should be remanded.

Let us accept the premise that this law was mostly intended to provide for those who have unusual difficulty obtaining or paying for health insurance. There were thought to be 30 million of them, probably more during an economic recession. What is the most cost-effective way to pay for ensuring this group? For practical purposes, most of the uninsured fall into three groups: criminals, mentally disordered, and illegal immigrants. Instead of disrupting the entire medical payment system, let us design three new programs, specifically aimed at the special problems of these three groups. They might not cover quite so many affected people, but tailor-made programs would probably do so more appropriately, get the job done more quickly (remember how long this process has already dragged on), and plausibly less expensively. By using block grants to the states, we might in time have the advantage of finding the best of several variations emerge.

Block grants may not be feasible in some of these areas, mostly because of politics, but for other reasons, too. In some ways, the prison population might prove to be the most difficult to make uniform, and while uniformity is not the highest priority, it has some value. Some regions tend to regard criminals as sick people who need treatment, while other regions regard criminals as outlaws who need punishment. Either way, costs may vary considerably, and frugal states do not enjoy subsidizing extravagant ones. In all states, criminal costs are unwelcome, so some states treat incarceration as a profit center, and first-class health care for convicted criminals is definitely not a goal. A wise Congressman avoids issues like this one, and block grants are probably the best solution. Obamacare excludes these people, entirely, even though there are 7 million of them.

A better case can be made for a health program for the 11 million illegal immigrants, but it comes down to much the same issue of local social attitudes affecting the politics, plus the fear that generous treatment will attract more immigration. A much better case can, therefore, be made for uniformity of federal subsidy, and by paying the subsidy directly to the healthcare provider, avoiding much of the political problems. Policing the borders is a national problem, and therefore the illegal immigrant health costs are a problem the federal government should absorb.

Mentally disordered people fall into several subgroups, but here the Federal Government is more fairly accused of making the problem worse, through closing the mental inpatient hospitals faster than drug therapy made it really feasible. Experience has shown that local treatment of mental disorder tends to be more generous and humane than remotely controlled reimbursement systems. When Congress became incensed at what seemed like exploitation of the DRG system, an overreaction was too harsh and business-like for a population that is by definition not completely responsible. The situation seems to call for a block grant program with a few incentives for state compliance with a limited set of standards.

In summary, if we look at the three main sources of clients among the uninsured, none of them seems suited for a national revision of care for the rest of the population. In fact, the generalization seems appropriate that they are highly unsuitable for a uniform national insurance program, pointing to higher costs and worse care if you approach them that way.

In fact, the political downside is worse. If you set about to do things without explaining why they aren't bizarre, people will assume you have some other motive than the one you offer.

Some regions of the country People in jail (there are about 7 million of them) are specifically excluded, and illegal aliens (at least 11 million) are indirectly excluded. Added to these two groups are those who will never be self-supporting because of developmental or acquired mental disorders. These three groups alone almost total of the forty million uninsured persons who were originally slated to be the main problem to be solved. It seems likely the specific and unique health financing problems of these three groups could have been better and less expensively addressed by devising three special programs for their specific problems (incarceration, non-citizenship, and mental defectiveness). In addition, 2 million members of (sic) Indian tribes are also excluded, and there are estimated to be 5 million persons potentially eligible for tribal membership. To stretch general health insurance to fit the unique difficulties of these admittedly difficult problem cases is far less likely to be satisfactory than directly aiming at them. And thus the trillion dollars extra cost estimate for the Affordable Care Act could likely have been better spent.

Just to take one of the three hard nuts, let's look at medical care for prisoners in custody. I have physician friends who are involved in prison medicine, and they are proud of the way they have suppressed medical costs to prisoners. Much of the problem revolves around the tendency to locate prisons in remote rural areas, where the quality of medical care is marginal, to begin with. But central to the issue is the determination of states to keep prison medicine inexpensive, no matter how anxious the rest of the nation is to upgrade the care. So state governments are not about to surrender control of the system to agencies which want to spend money. This isn't rocket science; the solution to this problem is more money, and not the kind of money that resembles Lucy holding the football until the last moment, then pulling it away. Prisons are tough places, with tough people in charge, and lots and lots of drug smuggling going on. Please let me know if you think there is anything in the Affordable Care Act which addresses these issues.

In fact, the briefest discussion of the three largest groups alone calls into question the wisdom of devising any program, insurance or otherwise, to apply to 100% of the population. Your author does not hate insurance, for healthcare or any other purpose. But few approaches will solve any problem for three hundred million people, for every day of their lives. We should thank the insurance industry for doing a good job for 90% of the public, and move on to other solutions for the last 10%. But in thanking them, they will pardon us for asking whether many of us would pay someone 10% to pay our bills for us, not counting the additional $10 billion income tax deduction we offer every year, to induce people and their employers to pay their bills. Why would anyone think insurance is cheap?

The most depressing feature of this issue is that it is likely to be repeated. If you believe as I do that the clever parliamentary tactics employed in its hybrid passage must have resulted in omitting some important features from the House Bill, and must have included many unwanted features in the Senate Bill which survived, then much more is to be uncovered, later. Unfortunately, a reading of the 450 surviving sections leaves the reader baffled as to which sections are central to the proposal, and which ones were included merely for window-dressing. At one time, the Administration may have thought this gave them a free hand to trade off superfluous baggage, but with the full text easily accessible to everyone, everyone can read it and continue to be annoyed by how it got there.

To aid in this process, we next print the table of contents, with section numbers. When the section number has been located, the full text of the statute can be displayed on any home computer, by entering the section number into the otherwise overwhelming text of the full Act. When risk corridors and other mysteries come up for discussion, it will generally be found that the matter reduces itself to a few sentences.

Originally published: Sunday, January 19, 2014; most-recently modified: Wednesday, May 15, 2019