“Going Bare” while Staying Covered

by Martin Harris 

Martin Harris

At last count, 26 States had legislatively expressed their disapproval of the mandate-to-purchase-health-insurance in the 2010 Patient Protection and Affordable Care Act. By Presidential State-count, that left 31 presumably approving, and by more-geographically-skilled opponents of PPACA, 24 approving. Several courts have declared the mandate un-Constitutional (SCOTUS will soon decide) and most politicians of classic-liberal mind-set (in today’s language, they’re called “conservatives”) argue that requiring health-insurance purchase is a violation of personal liberty. It’s not a new question: before the Revolution, Benjamin Franklin’s Philadelphia, with no government-furnished fire-fighter service, had sprouted a number of private companies on call to member/subscriber/premium-payers only. If their medallion was visible near your front door when they arrived, they’d extinguish the flames for you; if not, they wouldn’t. Modern equivalent: it went just so in exurban Nashville (TN) last year, when a non-subscriber’s house was left to burn. The owner had calculated the risk-vs-savings in “going bare” (a little insurance lingo, there) and lost his gamble. Presumably, had he suffered a heart attack after dinner, the rescue squad would have prevented him from assuming room temperature, subscriber or not. It’s called the free-loader phenomenon, and it’s at the heart (no pun intended) of the consumer mandate problem.

Yes, there’s a tradition that you don’t get what you haven’t paid for –think the “I paid for this microphone” Reagan-campaign line a few years back (actually, it was first the Spencer Tracy line in the politics/principle/romance 1948 movie, State of the Union) — but emergency rooms, by law, are forbidden to turn non-payers away, and so, while you can’t buy auto insurance (and service) after the wreck, you can get health care with neither insurance nor a pledge-to-pay, because citizens dying on sidewalks as they did (and do) in medieval London or modern Calcutta aren’t acceptable in modern Paris or New York. Those who us who argue that one should be free to decline insurance coverage (no mandate-to-buy) with the understanding that he has declined any future free-loader status as well, have no answer to the probability that he won’t pay and then he won’t decline, either. One possibility: the Ethan Allen Institute/John McClaughry proposal opposing mandates but requiring the guy on the gurney to sign a deduction-from-future-income agreement before the medics move in. (Of course, he could sign, and then have no income from which to pay, by intent or otherwise.) All of which makes a strong argument for the logic of a mandate. In contrast, those who oppose the concept of coerced health-insurance purchase have had to fall back on a logically weak, albeit ideologically strong, line of reasoning.

Ideological first. In fairly recent years, SCOTUS has twice approved the power of government to regulate intra-State commerce on the grounds that it might have been inter-State: wheat in 1942 and marijuana in 2005, both decisions drawing down ridicule from both Left and Right, so it’s been easy for critics of the insurance-purchase mandate to declare it similarly a beyond-the-Constitution reach; thus the 26 States supporting a strengthening of the Tenth Amendment (States’ rights) principle and applying that limits-on-Federal-power principle to oppose the mandate. Logically, not so easy. Critics like the Cato Institute point to a weakness (deliberately, Cato argues) built into PPACA –permitting anyone to delay buying insurance until after he’s gotten sick, and then to pay only his premium and not his full costs-of-service– to justify their anti-mandate position. Off-point and un-persuasive. Freeloaders can still go bare and stay covered.

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Because contemporary American sensibilities are unwilling to contemplate citizens (let’s leave the illegal-alien subject out of this discussion) who have chosen to “go bare” and can’t pay for services, assuming ambient temperature on the hospital steps, strict adherence to the Franklin principle –no medallion, no water—isn’t feasible. Only some form of coercion (government knows how to do that in other areas, like taxes and regulation) can minimize, if not entirely eliminate, the free-loader problem. The parallel principle has already been established: its acronym is FICA. It’s the funding mechanism for Social Security, a mandatory retirement-disability insurance program similarly based on the free-loader (deliberate or accidental) problem: some fraction of the population simply can’t or won’t save enough to be economically self-sufficient by the time inability-to-earn-a-living arrives in the form of accident or old age, and therefore only an enforced contribution –a mandated insurance premium—can establish a lock-box (well, not so lockable, in practice) to fund their eventual absence from the labor force. That’s the 1935 Federal Insurance Contributions Act: you will contribute, while working, because eventually you’ll need and want the coverage, even if you now pledge that you won’t, and all the rest of us are unwilling to let you go bare now and free-load later.

Even those of us who don’t at all mind our new label: Tenthers. That’s because there’s no essential ideological link between the Tenth Amendment –“the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the People”—and any taxing entity, Federal or State, using its revenues to provide guaranteed services to some citizens, similarly using its powers to require those eventual recipients to pre-pay in the form of “insurance” premiums, so that the free-loading which will unavoidably occur to some degree is kept as minimal as possible. If you’re of argumentative mode, you might recall the Marxian principle: “from each according to his ability, to each according to his need,” except that the premium for future health services would be actuarially based, just as the premium for future retirement services is income-based, and neither is wealth-based. And maybe –a little politically-incorrect theory here—it should include an incentive component. Just as in auto insurance: those who drive well and don’t repeatedly hit things or people pay less than those who do.

The private sector has been offering premium rebates for measurable healthful behavior –the Safeway Plan was reviewed in this space a while back—and now some local governments are (tentatively, at first) doing so as well. If you strongly object to mandated payments, ditch your whiskey, your cigarettes and your Twinkies and you’ll pay less than those who don’t.