Medical Finance Thoughts du Jour
First: the newswires are reporting that the mandate that citizens purchase health insurance in Obamacare has been struck down by a federal district court as unconstitutional. Logan Penza at The Moderate Voice has a nice summary of the ruling. The two (out of four) points I find most interesting are:
1. The attempt to require consumers to enter the market for health insurance is a regulation of economic inactivity that is beyond Congress’ power to regulate economic activity under the Commerce Clause. The judge noted that if the Commerce Clause were to be extended to regulate inactivity as well as activity, there would literally be no ground in any area of human life that would be beyond Congress’ regulatory reach, including decisions about personal nutrition.
2. The Necessary and Proper Clause does not save the individual mandate because it only gives Congress the power to use all “necessary and proper” means to pursue ends that are within Congress’ constitutional reach. Having found that regulation of economic inactivity is outside of Congress’ constitutional reach, the fact that the individual mandate may be necessary and proper means to regulate it does not remove that fundamental unconstitutionality.
I still stand by a comment I made previously on the predecessor blog – that universal health care is no more or less constitutional than Medicare, in my opinion. However, the comment, “there would literally be no ground in any area of human life that would be beyond Congress’ regulatory reach, including decisions about personal nutrition” drives straight to the heart of my discomfort towards increased government involvement in health care: He who pays for health care gets a say in how you live your life.
Put another way, it is not difficult to imagine a scenario where the feds, feeling the burden of a staggering health bill, feel obliged to combat rising costs by obliging Americans to eat better. All of a sudden…eat a Twinkie, and go to jail (or a medium security fat farm, more likely).
It sounds nuts, but don’t underestimate the power of the almighty dollar to convince a politician or a bureaucrat that nuttiness is a wise path to follow.
Regarding the second point…at least the summary above hints at an acknowledgement at something else that I and virtually every actuary have been saying about health insurance reform – that if coverage is to be universal, almost everyone must participate. If low-risk folks opt out of the system, finding not enough benefit derived from the cost, the cost of the system will increase at a faster rate, incenting more people to opt out, … and so forth until the system collapses.
If the District Court’s opinion survives the appeals process up through the Supreme Court, we could be left with the harsh reality that only two options are available without a Constitutional amendment:
- The pre-Obamacare status quo (perhaps with a few Obamacare tweaks which render the individual health market prohibitively expensive for many); or
- Single-payer: The feds pay all medical bills, and health insurance as we know it goes away.
In a way, those choices seem representative of what the political situation in this country has become – only the two polar opposites are viable given the current rules in place; a compromise between the two might actually be illegal.
While that court ruling certainly dominates the news cycle, something else has popped on my personal radar: My wife spent about a week in the hospital in March, where a spider-bite, compromised immune system, and MRSA conspired to lock her away for a few days behind a CDC quarantine warning.
The bill reads:
Total charges 17,925.78
Amount paid by insurance 3,731.76
Amount paid by patient 93.33
Adjustments -13,252.75
AMOUNT DUE 847.94
In the grand scheme of things, it’s not horrible…but it does touch on two things I’ve always wondered about hospital billing:
1. Given the amount of “adjustment” required to bring the cost down to something insurance was willing to pay, isn’t that an indication that the pre-insurance charges might be a bit excessive? Sure, health insurers have an incentive to drive a hard bargain…but something just feels wrong in the algebra here.
2. It’s taken nine months for the hospital to get us a final bill. That’s nine months of lost interest. Surely such inefficiency is an economic drag on the hospital, if not the health care system in general.
I suppose I should a third item to my list of things to wonder about:
3. What did we do to annoy Santa enough to deliver this little lump of coal? Granted, I thought we were lucky when we paid the prior bill, and perhaps I should have been suspicious for such a favorable outcome, but even so it’s not nice having a surprise $850 bill so close to the holidays.
You’d think that they could have at least included a Yuletide card to take a bit of the edge off.
