Health care reform: Who must buy insurance?

The Christian Science Monitor takes a simple stab at this question here.

But here’s a key thing to remember: There is a simple concept at the center of this rambling, Rube Goldbergian machine. Democratic healthcare reform would expand insurance coverage in America by requiring people to obtain it.

That’s right. The healthcare reform bill would mandate that most US citizens and legal residents purchase “minimal essential coverage” for themselves and their dependents. They can get this either through their employer, or, if their employer doesn’t offer health insurance, they can buy it through new marketplaces that will sell policies to individuals.

Those marketplaces would be called “exchanges.” We’ll talk more about them in a later story. (We’ll also cover subsidies for health insurance, when it all would take effect, how it would be paid for, and what it means for businesses.)

I feel sure that the requirement to purchase health insurance will be challenged in court. Forcing a purchase with the penalty of fines seems to compel associations which could give rise to constitutional challenges.  The forced purchases, however, are key to the provision which is attractive to most people: elimination of pre-existing conditions as a reason to refuse coverage.

Why is Congress doing this? It’s a pretty obvious way to expand coverage, for one thing. Also, it will help bring in a flood of new customers for health insurance firms, including healthy young people who might not need much healthcare.

For insurance firms, those new customers could balance out the losses they might incur if they can no longer deny coverage to people with preexisting conditions. (Yes, that’s another change the bill makes.)

And remember, many people will not be buying this coverage purely on their own. Uncle Sam will be helping them. The bookend to the individual mandate is federal subsidies for insurance purchases, which reach deep into the middle class. We’ll talk about those next.

In essence, you and I (via taxes) will be providing coverage for people who may not want it so that people who need coverage for serious conditions will have it. Insurers may still benefit by virtue of the millions of new subscribers. I suspect there will be severe fines for insurers who attempt to limit coverage or benefits. But I don’t know. And the lack of knowledge is what is politically troubling. There will be legislators who approve this bill over the weekend that have not read it.

According to the NY Times, key votes are still in play approaching a Sunday vote.

  • Lynn David

    It is going to pass. My congressman, who is now running for the Senate seat that Birch Bayh is vacating, has decided to vote for it. If he is voting for it, under that situation, it must almost be a done-deal that it will pass.

    I feel sure that the requirement to purchase health insurance will be challenged in court. Forcing a purchase with the penalty of fines seems to compel associations which could give rise to constitutional challenges. The forced purchases, however, are key to the provision which is attractive to most people: elimination of pre-existing conditions as a reason to refuse coverage.

    There is a somewhat analogous point of law in agriculture with federally-subsidized crop insurance. If you want to purchase crop insurance – and you know certain plots of land are more prone to crop losses – then you cannot just insure just those suspect plots, you must insure all land that you farm. Land isn’t exactly people and you need not buy crop insurance… but?

  • Mary

    On the other hand, someone like myself, with a pre-existing condition will now be able to get some insurance and not be bumped off for another health concern later on down the line because of the current one.

  • David Blakeslee

    :(.

  • Jayhuck

    I wonder how much we are already paying in taxes to cover those people who are uninsured and utilizing emergency services?

  • Lynn David

    I am in the same boat, Mary. The insurance I had was good, but they priced me out of it. The cost added up to everything I make of my crops in a year… if I am lucky. So I had to quit that insurance and then I had two conditions that precluded me from getting any other insurance. It wasn’t that they would not cover those conditions, they wouldn’t cover anyone with those conditions for anything else. Then I got MRSA and that added up to 3 different deal breakers with health insurance.

    I’m wondering if there will be a lifetime cap on what anyone might pay out of pocket, if so and it is retroactive, I might already hit such a cap.

  • Daniel Batt

    You know, it is just so bizarre to see Americans twisting themselves up in weirder and weirder ideological knots over this health care bill, as the rest of the civilised world watches on with dismay. Generations ago the rest of the developed world realised that just as governments had a responsibility for the education of its citizens, so it also had a responsibility for the health care of its citizens. And to see so many morons via Fox News et al try to cast this as the next step toward Nazism or communism, or a betrayal of Jesus message of çapaitalism and user pays, is for so much of the rest of the world truly a thoroughly uncivilised display.

    Democracy may have properly begun in the USA, but it has certainly not perfected it, that’s for sure!

  • Mary

    Tos see so many think that we not help the poor and oppressed (instead they call these people lazy and looking for a hand out) and twisiting the biblical commands is just wierd.

  • ginnette

    as a parent who has one daughter graduating from college and will be ineligible to stay on our plan after graduation and who as yet has no employment prospect, i am excited about the extension that might be made for her to stay on our insuance plan til 26.

    also as a parent of a daughter of 25 who could not afford $400/month payments for health insurance and went uninsured, before she went back to get her masters i am excited.

    now she is turning 26 and will be uninsured again unless she can find a job with insurance during this down economic times. she has had many health issues this past year so i am excited about her being able to get insurance on her own if she needs too even with the preexisting condition.

    BUT, this daughter has been abroad this school year and i have seen the kind of care available to her as she struggled with her health and attempted to get answers. in one afternoon she visited 5 hospitals before she found one that had an ENT at the hospital that day.

    we ended up flying her back to the states for $750 dollars and within a week got multiple tests run that would have never happened or taken forever to happen in europe due to their health care system.

    so i am very skeptical of “the government being responsible for my healthcare”.

  • Mary

    Health insurance – helath care. No health insurance – no health care – good, bad or otherwise.

  • Christian Lawyer

    Warren,

    I know the press generally refers to the “individual mandate” as a “requirement” that everyone buy health insurance. And, you’re right that, phrased that way, it sounds like a stretch of Congressional power. Legally speaking, however, it’s not actually a “requirement” or a “forced purchase.” It’s a tax that one can be exempted from if one purchases a qualified health insurance plan. To us, as individuals, that legal technicality might not make much difference. Constitutionally, however, since Congress’s taxing (and exempting) power is long-established, it makes it easier to see how the mandate could be upheld.

    In addition, to the extent mandatory health insurance is similar to the requirement that we all “buy in” to the Social Security system through mandatory payroll taxes, or similar to the mandatory unemployment insurance that employers must pay for, it is also likely to be upheld. Social Security and mandatory unemployment insurance were radical in their time, but when challenged, were upheld by the Supreme Court under the “necessary and proper” clause in decisions that have stood relatively unchallenged since then:

    Congress may spend money in aid of the “general welfare”. Constitution, Art. I, section 8; … Nor is the concept of the general welfare static. Needs that were narrow or parochial a century ago may be interwoven in our day with the well-being of the nation. What is critical or urgent changes with the times.

    The purge of nation-wide calamity that began in 1929 has taught us many lessons. Not the least is the solidarity of interests that may once have seemed to be divided. Unemployment spreads from state to state, the hinterland now settled that in pioneer days gave an avenue of escape. … Spreading from state to state, unemployment is an ill not particular but general, which may be checked, if Congress so determines, by the resources of the nation. If this can have been doubtful until now, our ruling today in the case of the Steward Machine Co. supra, [unemployment insurance case] has set the doubt at rest. … The hope behind this statute is to save men and women from the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey’s end is near.

    The problem is plainly national in area and dimensions. Moreover laws of the separate states cannot deal with it effectively. Congress, at least, had a basis for that belief. States and local governments are often lacking in the resources that are necessary to finance an adequate program of security for the aged. This is brought out with a wealth of illustration in recent studies of the problem.(9) Apart from the failure of resources, states and local governments are at times reluctant to increase so heavily the burden of taxation to be borne by their residents for fear of placing themselves in a position of economic disadvantage as compared with neighbors or competitors. We have seen this in our study of the problem of unemployment compensation. Steward Machine Co. v. Davis, supra. A system of old age pensions has special dangers of its own, if put in force in one state and rejected in another. The existence of such a system is a bait to the needy and dependent elsewhere, encouraging them to migrate and seek a haven of repose. Only a power that is national call serve the interests of all.

    Whether wisdom or unwisdom resides in the scheme of benefits set forth in Title II, it is not for us to say. The answer to such inquiries must come from Congress, not the courts. Our concern here as often is with power, not with wisdom. Counsel for respondent has recalled to us the virtues of self-reliance and frugality. There is a possibility, he says, that aid from a paternal government may sap those sturdy virtues and breed a race of weaklings. If Massachusetts so believes and shapes her laws in that conviction must her breed of sons be changed, he asks, because some other philosophy of government finds favor in the halls of Congress? But the answer is not doubtful. One might ask with equal reason whether the system of protective tariffs is to be set aside at will in one state or another whenever local policy prefers the rule of laissez faire. The issue is a closed one. It was fought out long ago. (10) When money is spent to promote the general welfare, the concept of welfare or the opposite is shaped by Congress, not the states. So the concept be not arbitrary, the locality must yield. Constitution, Art VI, Par. 2.

    Helvering v. Davis, 301 U.S. 619 (1937) http://supreme.justia.com/us/301/619/case.html

    There are good legal arguments by top constitutional scholars on both sides, though:

    http://healthcarereform.nejm.org/?p=2764&query=home

    http://www.heritage.org/Research/Reports/2009/12/Why-the-Personal-Mandate-to-Buy-Health-Insurance-Is-Unprecedented-and-Unconstitutional

  • Lynn David

    Obama’s letter (bold in original):

    __________________________

    Lynn –

    For the first time in our nation’s history, Congress has passed comprehensive health care reform. America waited a hundred years and fought for decades to reach this moment. Tonight, thanks to you, we are finally here.

    Consider the staggering scope of what you have just accomplished:

    Because of you, every American will finally be guaranteed high quality, affordable health care coverage.

    Every American will be covered under the toughest patient protections in history. Arbitrary premium hikes, insurance cancellations, and discrimination against pre-existing conditions will now be gone forever.

    And we’ll finally start reducing the cost of care — creating millions of jobs, preventing families and businesses from plunging into bankruptcy, and removing over a trillion dollars of debt from the backs of our children.

    But the victory that matters most tonight goes beyond the laws and far past the numbers.

    It is the peace of mind enjoyed by every American, no longer one injury or illness away from catastrophe.

    It is the workers and entrepreneurs who are now freed to pursue their slice of the American dream without fear of losing coverage or facing a crippling bill.

    And it is the immeasurable joy of families in every part of this great nation, living happier, healthier lives together because they can finally receive the vital care they need.

    This is what change looks like.

    My gratitude tonight is profound. I am thankful for those in past generations whose heroic efforts brought this great goal within reach for our times. I am thankful for the members of Congress whose months of effort and brave votes made it possible to take this final step. But most of all, I am thankful for you.

    This day is not the end of this journey. Much hard work remains, and we have a solemn responsibility to do it right. But we can face that work together with the confidence of those who have moved mountains.

    Our journey began three years ago, driven by a shared belief that fundamental change is indeed still possible. We have worked hard together every day since to deliver on that belief.

    We have shared moments of tremendous hope, and we’ve faced setbacks and doubt. We have all been forced to ask if our politics had simply become too polarized and too short-sighted to meet the pressing challenges of our time. This struggle became a test of whether the American people could still rally together when the cause was right — and actually create the change we believe in.

    Tonight, thanks to your mighty efforts, the answer is indisputable: Yes we can.

    Thank you,

    President Barack Obama


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