How are health reformers to respond to someone who says he chooses not to buy health insurance? Someone with a fair amount of sophistication on this issue has made that decision and wrote about it recently.
Many proposals, including the one now being implemented in Massachusetts, would impose a fine to require compliance. That's not impossibility in a society where all workers are required to pay for Medicare that promises to pay their bills if they live long enough to become eligible.
But few are totally comfortable with such a coercive policy.
This story involves an apparently healthy man who thinks he can afford medical bills of up to $50,000 and thinks it's improbable that he'll confront expenses beyond that. The challenge he poses could be sidestepped if he purchased a policy - which probably doesn't exist yet - with a $50,000 deductible. But he doesn't appear interested in that.
The root of his argument is that he knows the odds and has concluded they're not in his favor. It is improbable that someone of his age and health status will have medical expenses that exceed the several thousand dollars he'd have to pay in premiums. That could be papered over by providing very expensive and generous subsidies from the government. As the price dropped, his resistance to purchasing insurance would probably disappear. At $10 a month, he'd likely be an easy sale.
The taxpayers - a group he's presumably a member of - would pay the cost of the subsidies.
But what he's really doing is quietly challenging the entire basis of insurance and making an unarticulated argument that underlies some of today's political stress. He's done a cost-benefit analysis and figured out he's unlikely to get benefits that exceed his costs. If such logic was pervasive and coverage wasn't mandatory, few of us would buy homeowners or auto insurance because, in each case, most buyers get back a lot less than they put in, if indeed they get anything back at all.
It would be difficult to pay for a system where everyone got back more than he put in (although it sometimes appear that Medicare is testing this theory) and the concept of insurance as we know it would be destroyed. Mind you, I'm not talking about evil, profit-seeking private insurance companies here. This is about the logic of insurance of any kind.
Insurance works best when there are large pools which provide added assurance that most people will get back less than they put in. Selling insurance to sick people is not a viable economic model. That's an idea that nearly guarantees operating in the red. No one can afford to insure the sick unless they simultaneously receive premiums from a large number of well people.
Insurance companies that have taken this argument to an extreme by avoiding those with pre-existing conditions may be socially irresponsible, but their position is not devoid of logic. They support the idea of mandatory universal coverage because that would assure them a supply of well people who could subsidize the sick. But what will happen if healthy folks don't want to participate?
An argument can be made that medical care should be a public good - comparable to public schools, public libraries or public transit - where everyone pays and some get big benefits while others get none. At least there's a precedent for that structure. But no one is seriously pursuing that option.
It inevitably imposes limits on choice. Schools don't necessarily teach Japanese even if some students believe learning it would be beneficial. Some neighborhoods get extensive subway service while others depend on infrequent buses. We're committed to a system that makes such choices in a more opaque fashion.
Cynics like to say reforming America's health system is impossible because there's nothing now that deserves to be called a system. When we talk about health insurance reform, we may be suggesting a similar trap because the product involved is something very different from what is typically considered insurance.
