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Should health reform be a carrot or a stick?

States seek a more heavy-handed way to force coverage

When it comes to motivating Americans to have adequate health insurance coverage, we much prefer the carrot to the stick.

Health reform is back in the courts this week, and we were interested to read this Politico report, which lasers in on what we think is a good discussion – not about activity or inactivity – but about what folks might see as an alternative to the individual mandate.

In the piece, Jennifer Haberkorn notes that the federal government is now arguing that the individual mandate is at least a better idea than one alternative suggested by the states in a recent legal brief challenging its constitutionality. Haberkorn writes:

“Earlier this month, the states wrote in their own brief to the 11th Circuit that Congress cannot compel someone to buy insurance, but one legal way to ensure that people pay for medical services is imposing restrictions or penalties on people who attempt get health care without insurance.”

The brief was saying two things: 1) That the states do want more Americans to have health coverage, but that 2) they’re simply coming at the challenge of getting people covered with a different approach. Instead of mandating coverage on the front end, the states favor penalizing the uninsured on the back end – punishing those who presumably would be taking a “free ride” on the system.

It’s in contrast to health reform’s approach, which offers Americans a raft of incentives to get coverage on the front end in order to prevent tragic health care scenarios: bankruptcies due to huge medical costs, for instance, or death.

don’t play with sticks

The states’ approach is basically a stick, and we’re not impressed. First, it’s based on an assumption that everyone who doesn’t have insurance is trying to get a free ride. We know that some people ARE trying to get a free ride even though they themselves might not see it that way – like the young people who believe they’re too healthy to be bothered with or billed for health insurance.

But is everyone who’s uninsured trying to game the system? Or are many simply living paycheck to paycheck (if they have a paycheck at all) in this crappy economy?

Second, we doubt the threat of a penalty on the back end really changes people’s behavior. Let’s say we make it really obvious to folks who can’t afford health insurance that they’re going to be penalized for using health care. What will they do? Rush out and buy a policy and skip the month’s rent or wait to buy groceries? Nope. They’ll take their chances because they think, “I might not get sick or hurt, but I’m definitely going to need food and a place to live.”

And then, when they need treatment? They’ll skip treatment or go as long as they can without. I just heard a story the other day about an uninsured woman who severely cut herself, then declined to get stitches because she couldn’t afford them, instead bandaging her own wound (which then “bled for days”) and hoping for the best. Her Band-Aid approach makes a great story, unless it ends with the eventual amputation of her infected finger.

and eat your carrots

The carrot of health reform, meanwhile, consists of provisions designed to expand coverage through tax incentives for small businesses, subsidies for low-income individuals, consumer protections from industry abuses, and on and on. It’s convincing Americans to “get on board,” not by using a threat, but by pointing to the life-sustaining, economy-boosting effects of not letting anyone fall through the cracks. As Mom said, “It’s good for you.”

At worst, the individual mandate could be considered carrot sticks, taking away your tax subsidy if you don’t get on board. And in our opinion, the worst that can happen if Americans are mandated to have insurance is that everyone will pay a little more.

The alternative? If Americans are not mandated to have insurance and instead are penalized for “trying to get a free ride,” the worst we will see is health care tragedies that range from personal bankruptcies to the worst: death due to inadequate or complete lack of care. As the Administration wrote in its own legal brief:

Because the need for health care is unpredictable, plaintiffs’ (states’) approach would require that individuals obtain insurance or else risk being left on the street after a car accident.”

That kind of horrifying scenario is a nightmare, but sadly, it’s not unimaginable right now.

So we need to ask ourselves, “Are we really that kind of nation?” The answer, we hope:

“Please pass the carrots.”

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