Thursday, June 18, 2009

What Texas traffic enforcement can teach the national healthcare debate about "individual mandates"

To veer slightly off topic for a moment, I wanted to record an observation about the national health insurance debate presently going on in Congress, and in particular the move to create an "individual mandate" for the uninsured requiring them to purchase health insurance.

Texas and many other states have already tried "individual mandates" for auto insurance, and the results have been abysmal: About 25% of Texas drivers have no auto insurance (roughly the same percentage of people that currently lack health insurance).

When Texans are ticketed for no insurance, they face steep fines which, rather than encouraging compliance with the law, frequently sink the uninsured even further into a financial hole and make it less likely they'll be able to afford insurance. Yet, at the same time, the state invests virtually zilch in mass transit so as a practical matter, it's difficult bordering on impossible in many areas to work and survive without a car.

Thus the functional effect of an "individual mandate" policy is to criminalize poverty, or at least that's been the case with auto insurance. I'd hate to see a health insurance model follow down the same, failed path.


Anonymous said...

I agree with you Grits, and think all the discussion of health care mandates as well as the public option is just dancing around the elephant in the room that we aren't allowed to see b/c of political ideology, which is that we need a single payer system and to get the insurance companies out.


Anonymous said...

I too agree with your concern -- fines work best when those fined have the resources to pay the fines. For those without the resources the fine does create a bigger hole for them and drives them further away from compliance. In the case of probationers and parolees -- an additional offence is sometimes a desperate attempt to obtain the funds to pay a fine due that day so they won't be reincarcerated.

With regard to health care -- consider the following example. I come from a family with about 90 Canadian family members. In about 40 years of conversations on all kinds of things -- never once have any of them said they envied my wife and I for living in the States because of the quality of care. They have a very effective single payer system that works well for those who have genuine medical need (i.e., non-elective care). My mother in law died last year at the age of 86 after two weeks in hospice care. The out of pocket costs for the family was only for her meals. Prior to hospice care she had regular visits from home health care nurses at no cost to the family.

In the last 30 years she had two hip replacements and a double mastectomy for late onset breast cancer. Each time - her direct costs were limited to meals. The health care she received was incredibly good. People who come to the US for care are typically those who seek elective care not deemed as medically necessary, do not agree with their diagnosis by Canadian physicians, or decide they don't want to wait a bit to receive treatment.

Having high quality cradle to grave health care is important and tremendous personal and social value. It provides an incredible sense of peace of mind because you know health care in an emergency or for a serious disease won't bankrupt your family.

When asked if they would trade health care systems to receive the care offered in the US if it would reduce their taxes -- no one in my extended Canadian family has ever said they would prefer the US system.

A single payer system can and does work -- and by the way it provides much better health outcomes than that in the US.

jimbino said...

A health insurance mandate not only taxes poverty, it taxes travel.

Consider the hundreds of thousands of Americans who have retired overseas: though having paid premiums for 45 years into Medicare, they can't benefit from Part A, and subscribing to Parts B and D, which are subsidized by their taxes, will also not benefit them.

A health insurance mandate would also unfairly tax any younger American traveling or living overseas. For this reason, Canadians are right now much less free to travel and live overseas than are Americans, the difference being that the US Government purports to have the right to continue to tax Americans living and traveling overseas, while current socialized medicine countries do not.

ChipSeal said...

And yet, I cannot obtain insurance that would protect me if I get hit by an uninsured driver at any cost!

I am car-free, but I use the public roads everyday on my bicycle. The only way I can obtain uninsured motorist coverage would be to buy and insure a house or a car.

A bicycle club in Montreal has obtained coverage for its members, and the policies I need are widely available in the UK. Why not here?

David C said...

Agreed. A requirement for employers to buy health insurance for their workers would just force them to lay off workers or reduce their pay. The theory goes that it'll save money by not having the uninsured use expensive care in emergency rooms, but I don't think that's going to make much of a difference. It's a talking point for politicians to use when the real goal is to reduce the rate of rising costs through Comparative Effectiveness Research, expanded MEDPAC oversight of Medicare, and/or a public plan. Some politicians understand that; some only know the talking points.

Anonymous said...

As society becomes more affluent, we will be able to afford more jails. Just as incarceration rates have risen in the past, they could rise in future. Rather than incarcerating 1%, perhaps we will soon incarcerate 1.5%.

It may be that few of our miserable 25% are deterred by fines, but hopefully we as a society can someday lock up a great deal of them, and that will have a good deterrence effect.

scottindallas said...

Great point, here's another. I just had another wonderful experience with USAA insurance. USAA is a gov't run insurance and investment house that is simply exemplary.

Their rates are great, their policies fair. I have a credit card with them and they really helped me out, their rates are steady despite some mistakes on my part.

Please someone compare USAA to Geico for competitiveness. I assure you that USAA rates tops in customer service, financial soundness and the like.

Why, cause there isn't just a free market but three, the free market that I as a landscaper, your restaurants and service industry provides, the customer is always right.

Then, there is the professional market, the customer can't always be right, after all it's expertise you are buying. These groups limit competition by forming guilds/bars/boards that have them police themselves. Franklin said, "a country boy between two lawyers is like a fish between two cats."

Finally there is the utility/monopoly market these are universally needed, often gov't initiated in whole or part. It is silly to pay a commission for selling running water, electricity or other essentials.

Ask yourselves about how hospitals fit, are they not hugely subsidized in construction, land acquisition, zoning, operation, and infrastructure?

Doctors are professionals like lawyers, hospitals are public places, paying entrepreneurial reward for medical administration of these essential common is wrong.

How do we pay huge commissions for something EVERY ONE is required to have. In these markets Franklin's fish would be in a kennel of cats. We all just experienced this with gas, a natural monopoly, last Summer. We were powerless but to pay their rates, THIS IS NOT A FREE MARKET, NOR IS MEDICINE.

It mustn't be treated as such. This certainly should cause us to look at other examples. We see Europe offers health care with better measurable outcomes for 1/2 the per capita cost.

We see USAA offer auto insurance for lower rates, with better service than their private competitors. They are better capitalized. Please, conduct inquiry into USAA's financial standing through this recent storm. Could it be they navigated the waters better because they weren't forced to bid up their profits, but to stay in conservative boundries?

Bankers shouldn't really be wheeler dealers, should be rain makers and shouldn't be paid as such. That not banking but gambling.

Anonymous said...

I have been a member of USAA for nearly 40 years -- it is a private corporation that was established by retired military personell. It is not and never has been government organization.

That said, it is exceptional and run by the same folks that at one an earlier time in their careers they were government and military employees.

Anonymous said...

Government does succeed far more than it fails but when it fails everyone notices because it is the "Government".

When private coporations fails (and they fail alot) very few notice unless it has disasterous consquences for the general public.

So, we get an inaccurate picture in both directions -- government looks worse than it is and private organizations look better than they are.

Anonymous said...

Just some food for thought - I recently moved to another state. I sought to obtain a new DL from that state because mine was expired.

It was a real shocker to me that before I could be issued a DL license I had to show proof of car insurance.

Well I don't own a car and only occasionally drive one due to some family circumstances. It didn't make any difference. I still had to purchase "non-owner" insurance before I could get my license even if the car I was driving was fully insured.

Now I am paying $25.00 a month to take public transportation (glad to have the option) and occasionally driving my family members car.

I don't know what the penalty is for not having this type of insurance and I don't know if one who might be stopped is required to pull out proof of insurance along with proof of ID while walking down the street.

All I know is that it sure did tick me off at the time!

Anonymous said...

Part of my family lives in Canada and the health care they receive is top notch. Not one of them has had to stand in line (figure of speech) to get any type of surgery needed, no matter what type of surgery they needed at that time. They see the same family practice doctor and if hospitilation is required they only pay for the food they consume. The care is excellent and the nurses are very knowledgeable and very patient friendly.

I work in the health care field here, and some of the nurses who come out of school today, are not there for the reason they need to be there, care of people, with empathy and concern, but only for the paycheck. Remember, I am one of those nurses who continue to work so don't even think about trying to insult me, I see it every day.

My family in Canada pays $90.00/month for their health insurance and the visits to their doctor are not limited; medications are far cheaper in Canada than here also. Now tell me what is going on!!

Those of you who believe the adds on TV about rationing of care, need to get the facts before you critize other countries, maybe their elected officials have not been bought and paid for by special interest groups!!