Individual Mandate

What happens if reform fails? Billions and billions in uncompensated care.

What happens if reform passes? A whole lot less uncompensated care. About half, according to an Urban Institute report this week.

According to the study, there were 49.1 million uninsured Americans in 2009, and uncompensated care reached $62.1 billion -- or $1,264 per uninsured person.

Without comprehensive health reform, which would cover more than 30 million uninsured Americans, the number of uninsured will likely grow to more than 57.0  million (at best) or 65.7 million (at worst) over the next 10 years. In this scenario, the cost of uncompensated care is estimated to reach between $106.6 billion and $141.4 billion in 2019. However, with comprehensive health reform, the study shows that uncompensated care costs will fall to $54.0 billion in 2014 and $46.6 billion in 2019. That's still a lot of money -- but the trend goes in the right direction.

We're bracing for the inevitable jokes: heard about the new jobs bill for lawyers? Health care reform.

Whether it's state governments’ attempt to preemptively block a federal individual mandate to purchase insurance, the creation of health courts to address medical malpractice woes, or legal immigrants in Massachusetts suing over coverage -- lawyers don’t need to worry about where their next meal is coming from.

We were struck, though, by the Massachusetts class action lawsuit challenging a state law that prohibits certain legal immigrants from accessing health insurance coverage available to citizens of the Commonwealth. Struck by the irony, that is, of how the one state in the union that has attempted to provide  coverage for everyone is getting sued by a group that is not covered. What a contrast to the states like Virginia  that are prepared to fight against having anyone force insurance coverage on their citizens through a mandate.

The economic recession has not been good for anyone’s wallet. Between June 2008 and June 2009, the number of Medicaid enrollees grew by 3.29 million, or 7.5 percent.

So who’s feeling the punch? Everyone. Just because you're insured, doesn't mean you're off the hook.

Julie Rovner of NPR  helpfully explained that the individual mandate -- you know, the one some Republicans have been portraying as an evil, unconstitutional, liberty-squelching abomination -- was actually … a Republican idea. An idea backed in the past by some of the same senators who deem it unacceptable today.

As we were thinking about what might happen at the nationally-televised bipartisan health summit President Obama offered, we clicked over to Nate Silvers www.fivethirtyeight.com blog for some insight. He, alas, is still analyzing the Saints coaching and that gutsy onside kick... But maybe there's a parallel after all.

Steve Pearlstein, who has written quite a bit of insightful stuff about health care this year, weighs in:

Okay, so Massachusetts voters elected a hunky, unknown Republican to fill Ted Kennedy's Senate seat. That's no reason to ignore the result of a national general election, throw out a year's worth of hard work on a range of important issues and rush to embrace a bunch of simple-minded solutions meant to mollify an angry electorate.

Honestly, in a city that thrives on nonsense, we've heard more of it in the past few days than you normally do in a year.

The outcome of the Massachusetts Senate race has many Americans asking, “Can’t Congress just scale back the current reform package? Can’t we just pass health care legislation that fixes the insurance market and makes how we deliver health care more efficient?”

Unfortunately, achieving these core health reform goals is not simple. Here’s why.

My colleague Elizabeth Carpenter posted earlier today about the House and Senate approaches to insurance exchanges. The House favors a federally run national marketplace. The Senate creates state exchanges. Both have the same goal: a consumer-friendly, competitive yet regulated marketplace for high quality, affordable coverage.

Some Republican-dominated states are already objecting to either version, or threatening to try to roll back Democratic-passed reform altogether. (This is one reason we had hoped for bipartisanship.) Here's a recap of some of what they are saying:

Economic decisions are rarely the product of a simple costs-benefit analysis. This is particularly true of the decision to purchase health insurance, where the costs are upfront and certain, while the benefits are uncertain and down the road.

Requiring that all Americans purchase health insurance confronts this challenge, and it is a central aspect of the current health reform legislation in Congress. The so-called individual mandate is necessary to make other insurance market reforms like community rating and guaranteed issue work. Coupled with subsidies to make insurance affordable, the individual mandate can be an effective tool for coverage expansion.

The debate in Congress focuses mostly on whether the penalties for not purchasing health insurance ($750 in the Senate Finance Bill) relative to the coverage subsidies are enough to actually influence people's decisions. The success of an individual mandate, however, depends on more than just subsidies and fines, and Monday's Washington Post lays out some important lessons from the field of behavioral economics.

One of the central insights of behavioral economics -- reflected in recent books like Nudge, which was co-authored by the White House's Cass Sunstein -- is that the choices we make are often determined by how easy it is to make them. As Brookings' William J. Congdon tells the Post:

Details are firming up in the merged Senate health care reform bill, reports The Wall Street Journal (subscription required). Here's a preview of major provisions that appear to be highly likely to make it into the final bill: