In Mass, everyone has to have health insurance by January 1. Their new universal health insurance system has expanded government coverage options and driven down the price of private insurance with government subsidies and state collaboration with health insurance companies. But everyone has to sign up. If they don’t they’ll face tax penalties starting next year. Mass. residents who are uninsured as of December 31 2007 will lose their personal exemption – worth $219 – when they file taxes in the spring. And if they continue to lack health insurance into 2008, they will be taxed 50% of the price of the least expensive health insurance plan available, with the charge estimated to be about $150/month.
Critics are calling foul, and saying that the mandate that everyone must have insurance is too much government intervention. But the state has already expanded government health insurance so that more people qualify, and lowered the price of private insurance; this can’t just be a one-way street. The citizens have to step up too. And unfortunately, without some sort of legal or financial penalty, there will always be people who don’t consider health insurance to be a priority. They earn too much money to qualify for government-funded health insurance, but they would rather spend it on something other than health insurance. These people may be very healthy, and since they have never had a need for health insurance in the past, they assume their good luck will continue. Then when something happens and they need medical care, they invariably end up in the emergency room without health insurance. And when they don’t pay their medical bills (because they can’t, since most of us would be completely out of luck if we had to come up with $200,000 or even $20,000 out-of-pocket for a medical expense), hospitals raise rates to compensate for the bad debt, and insured patients foot the bill.
Liability auto insurance is mandatory just about everywhere in the US. The logic is that if you cause an accident, you have to pay for the damages incurred by the person you hit. Since most people don’t have significant sums of money sitting around for this purpose, we’re all required to carry liability insurance, and thus a guarantee that the expenses for damage we cause with our cars will not be passed on to the victim. But we’re not required to carry comp/collision insurance unless the car is still being financed, because it’s up to each of us to decide if we want to insure our own vehicle. Both critics and proponents of mandatory health insurance requirements liken their position to auto insurance laws. In an overly-simplified explanation, critics might say that nobody is required to carry comp/collision insurance on a vehicle that they own outright, and thus nobody should be required to have health insurance on themselves.
But the logic is flawed. If you wreck your car and don’t have insurance to repair or replace it, you will have to figure out another way to get around. Unless you have a rich uncle, nobody else is going to fix the situation for you. And if you choose to drive without insurance on your own vehicle, you know that the worst-case scenario is a total loss – equal to the value of your vehicle. This is not the case with liability auto insurance (you might hit an H2 and a Lexus at the same time, or you might hit a pinto, you never know). And it is also very much not the case with health insurance. Your claim could be for a few hundred dollars to remove a funny mole, or it could be for $300,000 when a persistent headache turns out to be a brain tumor.
If you end up having emergency surgery without health insurance, the bill is going to be hefty, and more often than not, the hospital is going to get stuck with it. And those of us with health insurance will in turn pay higher premiums. Everything has a price. And whether Colorado wants to move to a single-payer universal health care system, or a system similar to what they have in Mass, with a combination of government coverage and private coverage, there has to be a requirement that everyone be covered. That is the only fair way to spread the risk and cost to the greatest number of people. We all have to pay for this, either through taxes or health insurance premiums. There is simply no way to guarantee that a person is never going to need health care, so there is no way that anyone should be able to opt out of health insurance.