The Myth of Adverse Selection
I write most frequently on my own blog and at the most popular liberal blog in Massacusetts, Blue Mass Group. One of the smarter people there has been toting the theory that we can’t have a ban on preexisting conditions without creating a mandate, because suddenly anyone healthy would drop their policies. I didn’t care very much, until I read that’s precisely why Obama had his "come-to-Jesus" moment on the mandate. It’s simply untrue — and Massachusetts proves it.
It’s ironic I first heard this from someone in Massachusetts, because as one of the very, very few states with bans on discrimination against preexisting conditions, we’re easily able to bat this "adverse selection" theory down. Before Health Care Reform was ever passed in Massachusetts, we still had bans on discrimination against preexisting conditions — and, with a rate of health insurance coverage at roughly 92%, we were already amongst the best states for coverage across the entire country. In fact, since Massachusetts introduced mandates, our rate of coverage has only increased by approximately 4%, to 96% — largely due to the robust subsidies we’ve provided for people who had trouble affording insurance, with little access to it, before.
So, if allowing a ban on preexisting conditions without a mandate would be a catastrophy for the country, why was it working fine in Massachusetts? The answer: the academics and Ezra Kleins of the world are just wrong. They clearly don’t understand the basic fact regarding insurance — people want it. Even healthy people understand they could get in an accident at anytime, or get sick quickly. They also understand the same could happen to their spouse or kids. They also understand the burden they’d be without insurance, and the fact that emergency-room treatment is not only more expensive, but can undermine chances of recovery by getting to the problem very late in the game.
If we want to increase the number of people with insurance, we should be focusing on access, quality and affordability. These are the things that are determining whether or not people have insurance now. If they can’t afford it, they won’t get it. If they don’t have easy access to it, either through employment or the government, chances are they can’t afford it on their own. And if they can somehow fit it in their budget, but the quality sucks, they’re likely to decide it isn’t worth it for them — and if they’re choosing between rent and bad health care, who are we to make that decision for them?
A mandate works when the government is involved, because that’s when people can take advantage of it. As it stands, with insurance companies being exempt from anti-trust laws, even if we mandated insurance to expand pools, there’s no reason on earth for those insurance companies to share their savings and efficiencies with their costumers — not without real competition from the government. So, as Firepups, we must continue to beat back these quack ideas and insist that health care reform be based on what’s been proven to work: quality, access and affordability. And we must continue to beat our drums and never stop saying, "No option, no mandate."