Your Take on the Health Care Law

This past week, the Supreme Court wrapped up three days of oral arguments over the health care law.  At stake is the health care law’s individual mandate that would require most citizens to have health care as part of a systematic overhaul intended to lower medical costs.  The individual mandate is crucial to the survival of the law because it is the main funding source for the programs detailed in the rest of the bill.

We won’t know the court’s decision for a few months, but it isn’t looking good for the mandate.  Many of the law’s provisions won’t take effect until 2014, but some provisions have kicked in early and are already taking effect.  I like the fact that young adults can stay on their parent’s insurance longer and chronically sick kids can’t be denied insurance coverage anymore.  But all this and more could be swept away in a few months. 

Health Care Access for Everyone

Health care is something that all Americans should have access to and in fact, that’s the way it is now.  If you’re in a car crash and sent to the hospital with life threatening wounds, you will be treated whether you have medical insurance or not.  And when the uninsured can’t pay for their treatment, the cost is shifted to the insured through higher premiums.

Let’s remember that insurance companies are in this business to make money.  They count on the fact that, for example(hypothetical), only 1 in 1,000 people will need a $100,000 heart surgery.  That way, they can charge each individual just $1,000 a year to cover any and all procedures.  But in the end of the day, the insurance company will always make money.  If not, they raise their premiums.

Why is Health Care So Expensive?

I believe that one of the reasons health care is so expensive because there is no competitive market for pricing.  When I want to buy a new tv, I don’t go out to the closest store and buy it.  I go to Best Buy, compare prices online, etc.  It should be the same for health care.  When the upfront cost of an $800 x-ray is shifted to the insurance company, you won’t see an immediate impact.  You see the impact a year later, when your premiums go up by 10%.  Unfortunately, the health care law does nothing to change this.

Personally, I like the idea of the Health Savings Account(HSA) because it forces you to pay for all the small routine costs when you visit your doctor.  Insurance should only be reserved for the huge catastrophes like when you break your leg, or need major surgery.  People clogging up doctor’s offices with runny noses and minor pains are the ones who shift the upfront costs to the insurance companies and force everyone to pay for it later with increased premiums.  Too many uninsured people use the emergency room as a primary care physician because they cannot be denied treatment there.

Legality of the Mandate

Conservatives have argued that the government is overstepping it’s boundaries by forcing us to buy this mandate.  However, I think this should be an exception.  What about paying taxes, contributing to social security, Medicare, etc?  Legally, these might not be considered a mandate, but I’m pretty sure you’ll go to jail for skipping out on these payments.  It’s pretty tough to live in modern day society without working, and receiving income, so in essence these are mandates.

I don’t want to be morally or legally responsible for denying anyone the right to health care.  So what should happen to those who get sick and have no insurance?  Shouldn’t someone pay for this, or should we ignore it and let them die?  This will never happen as the majority of people would never allow this.  There are definitely flaws with the health care reform law, but I think it’s a general step in the right direction.

Do you think the mandate should be legal?  Do you think you should be required to have insurance?  What should happen if you get sick?

-PF Pro

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Hi, I'm Harry, the owner and head writer for Your PF Pro. I started this site back in 2011 in order to create a place where young professionals could come and get all of their financial questions answered. On the site, you'll find articles on everything from asset allocation for retirement to saving money at Chipotle! So enjoy..

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Comments

  1. Mike Campbell says

    If the mandate is approved, my company will get a dramatic increase in members, which will lead to me getting more work, which in turn will allow me more money bro!! I’m hoping it passes.

  2. Matt says

    I think there’s a lot of reasons why healthcare is so expensive: inflated tuitions for doctors, nurses, etc., insurance companies’ inability to compete across state lines (monopolies), people not knowing how much their own treatment costs (like an MRI – $5,000 maybe?), Dr. Emergency Room as PCP (like you said), etc. The list could go on.

    I take issue with forcing people to get health insurance. Obviously people who can’t afford it now will likely attain some form on health insurance. So, that’s one less incentive for them to work (on top of their public housing, food stamps, etc.). Also, many people will receive the same coverage despite their level of production. That’s another disincentive to produce more. I once heard the quote attributed to Ben Franklin to the effect of, “once you trade freedom for security, you’ve lost democracy.” I think the healthcare mandate is just another example of the government trying to take care of us, one more way that they’re telling us they know better than we do (perhaps they do). But, if someone doesn’t want to buy health insurance, and puts the premium money towards a new car or a nice apartment instead, then who am I or anyone else to take away their freedom to buy something else with that money? Plus, my premiums will be cheaper (kidding, but it’s true). I just don’t want them crying to me when they get sick and have no insurance, because while they enjoyed their cable tv and iPhone, I lived in a basement and read old magazines, but made sure to pay my health insurance company every month.

    That’s why I also don’t agree with the concepts of Social Security, Medicaid, etc. The idea sounds great to our compassionate ears! But, once we know we’re getting SS, we don’t feel the need to save, and we expect the government to take care of us when we retire. On top of that, it’s a classic Ponzi scheme. So, even if it was run correctly (save and invest the money, give people back their own money with interest), I still wouldn’t agree that it’s a good policy long-term, let alone the fact that it’s actually run like a criminal financial enterprise.

    The book “The Millionaire Next Door” is sort of a case study to support the idea that the more people are taken care of, the less independent and self-sustaining they become. It’s counter-intuitive that the more you help people the worse off they are, but it certainly makes sense once you think about it. If my school tells me I’ll get my degree regardless of my grades and work, I’m certainly not going to do as much as I otherwise would have, and that will affect me down the road. It’s human nature. If the government keeps enacting legislation to take care of us, then there’ll be less and less care-givers. It sounds mean and heartless to say we should let some people suffer, but it’s the only system that works because it’s how we evolved.

  3. says

    Thanks for the detailed comment. I don’t think the government has done or will do a good job managing this health care issue, but I really don’t see a better alternative. Poor people won’t buy insurance, won’t save, they won’t do any of these things unless the government forces them to. I’m not worried about people like me and you who are disciplined and can see more than 1 day, or 1 week into the future.

    Do you think there will be a day when emergency room’s will turn away people without insurance? I can’t really imagine that happening in the near future. I don’t think the system we have now works well at all. The basic plan my employer offers costs $350 a month(they cover $250, employee pays $100). That is ridiculous for the average person who goes to the doctor a couple times a year. This law could provide some change to a system that desperately needs it. It will not be enough by itself, but hopefully it’s a start..

  4. Matt says

    I agree that poor people won’t do those things, and, in their defense, some don’t have much choice: dinner or health insurance (though that’s probably very few of them). I will say that I think everyone should be able to have access to simple things like antibiotics and check-ups, but only because it’s so cheap, and the cost would be minimal compared to the benefit. I still disagree that the government should force anyone to buy insurance. I understand that you’re trying to protect them from their own ignorance, but ignorance will just grow if we keep protecting it.

    I think we forget that if not for the prospect of profit, many of the drugs and treatments available today wouldn’t exist. Pharmaceutical companies spend billions of dollars and man hours on each drug and treatment that comes to the market. If not for the incentive of becoming wealthy, the people working there wouldn’t bother doing all of that work. Again, a sad fact of human nature is that we’re driven by profit. Just because a drug or treatment exists doesn’t justify everyone having access to it, because that drug or treatment wouldn’t exist in the first place if it was cheap enough for everyone to afford. If everyone can get it for “free,” and those who created it don’t benefit as much, then there’s little incentive for those in the future to create more drugs and treatments.

    I don’t know about the emergency rooms, both in terms of practicality and morality. God forbid I wind up in an ER any time soon, but I wouldn’t want them to delay my treatment because they were checking if I had health insurance. So I don’t know a good solution for that…do you?

    Last thing, I don’t think insurance should cover check-ups, teeth cleanings, or any other routine appointment. If normal, predictable things are covered by insurance, then it just adds the cost of it all, because the insurance company has to process everything. The whole point of insurance is to protect yourself against unforeseen issues, especially issues for which you couldn’t possibly pay yourself (like brain surgery). So, it’s like gambling that you’re going to go through something terrible. And you should hope you lose that bet! Both my insurer and I are rooting for me to be healthy, even though that means that in the end I paid my premiums for nothing.

    Sorry for the long comments. If they’re obnoxious let me know.

    • says

      No problem, I appreciate the discussion. You should consider writing a guest post for my site if you’re interested.

      You’re right on about all of the fancy drugs/treatments and I don’t think everyone should have access to those. Those are driven by profit, that’s fine with me. Not sure where the line should be drawn but there’s good arguments both ways. I don’t want to let people die but if they’ve been doing a horrible job taking care of themselves for 40 years, is this my problem?

      What you describe in your last point is the exact definition of an HSA. There should be a capitalistic market for basic check-ups, routine procedures, etc. If I break my arm, I’m going to ‘shop around’ and find a reasonably priced x-ray and doctor care at a local clinic. It’s obviously more work for me but I like that system and it rewards me for being healthy, staying in shape. I know my $3,000 deductible will be there if I have major problems.

  5. Jackie-O says

    Not All Poor people wish NOT to buy insurance. I know of several poor people, who buy insurance b/c they have little children, or the parents want the insurance to take care of them when an emergency crisis is at hand.

    Like you mentioned before, currently, un-insured people can go into the emergency room, and be treated (minimially), but at whose cost??? The taxpayer ultimately pays. So, if everybody contributes, there shouldn’t be any issues?

    • says

      I don’t think poor people don’t want to buy insurance. They just can’t afford it when faced with eating for that day or paying $50/month for minimal catastrophic coverage. There are so many problems to tackle with the entire medical care industry, I like moving in the direction of change. Obviously the system we have now is flawed and needs to be fixed.

    • Matt says

      The reasoning that an expense will work out if everyone contributes (via taxation) leads to $15 trillion dollar debts (financed via borrowing from abroad), and a plummeting currency. Those are some serious issues.

  6. says

    Welcome to the blogosphere. Just found your blog today.

    I’d like to dispute a few of your points. First, this one:

    “Health care is something that all Americans should have access to and in fact, that’s the way it is now. If you’re in a car crash and sent to the hospital with life threatening wounds, you will be treated whether you have medical insurance or not. And when the uninsured can’t pay for their treatment, the cost is shifted to the insured through higher premiums.”

    #1 All Americans have access to health care if they’re willing to pay for it. Why should it be otherwise? Do you have access to food for free? Shelter for free? Then why health care? Due to an unfunded government mandate on hospitals, emergency physicians, and other physicians who are willing to take unpaid call from a hospital ER, Americans have access to emergency health care without regard to their ability to pay (although they are still sent a bill which is turned into collections if they don’t pay it.)

    #2 When the uninsured don’t pay my bill, I eat it. I don’t get to pass it along to the government, other insured patients, or anyone else. Where does this idea come from? 20% of the work I do is simply donated, partially out of the goodness of my heart and partially due to that government mandate. How would you feel if you didn’t get paid for working Fridays, but still had to come in for 8 hours? You know what’s worse than that? Not only do I not make any money off non-paying patients, but I have the same overhead and the same liability. They don’t have to pay my bill, but can still sue me for literally millions if I screw up. You haven’t lived until you’ve received a letter in the mail asking for $5 Million (especially when your insurance limit is only $1 Million.)

    #3 Prices in health care are supply and demand, just like anything else. There’s no cost shifting. Insurance companies don’t “raise prices” to pay for the uninsured. They don’t have to pay anything for the uninsured. They negotiate the lowest possible price with the doctor to get the doc to take their patients. The docs negotiate the highest possible price the insurance company is willing to pay for that service. Every insurance company pays a different price, depending on how well they negotiate. The uninsured end up with the list price, which is purposely kept higher than the highest paying insurance company, because that’s where the negotiation starts. The doc doesn’t “raise prices” because he has to take care of uninsured. He raises prices because he can. If he can’t, he doesn’t.

    #4 You are correct about one of the reasons that health care is so expensive. The pricing isn’t transparent, and thus, the only competition is between the insurance companies and the hospitals/doctors. But there are two other major reasons. First, people consume too much of it. Too many MRIs, too many consultations, too many drugs, too many hospitalizations, too many surgeries, too many days in the ICU at the beginning and end of life (instead of dying already) etc. Why do they consume so much? Because they’re not paying for it, thanks to the government or their insurer. Co-insurance would help with this. Second, health care is expensive. Doctors and nurses are highly trained, hard-working, and are under constant huge liability. I’ve got news for you. They ain’t gonna work cheap. An MRI scanner costs $1 Million. It’s a really advanced piece of machinery. A simple ultrasound machine may be $300,000. You know how many $100 scans you’ve got to do to pay that thing off? Sterile stuff costs money too. As does keeping the hospital clean. And the bureaucracy….don’t get me started. Gotta pay for all the people making sure we adhere to all the regulations out there.

    Our health care system is a helluva complicated behemoth. It needs reform like mad. But it’s going to be a very complicated process, and it’s going to take a long time. We can start by getting rid of all these myths about it.

    • says

      Hi White Coat, thanks for your comment. I was hoping to discuss the matter with someone in the medical field, so I’m glad you found my article.

      #1 People do have access to the basic foundations for life: food, shelter, etc. Your tax dollars pay for soup kitchens and homeless shelters. I think health care is very comparable to these two things. Am I missing something? It’s a complicated issue deciding whether or not someone should receive life saving treatment. But in our current society, do you see this changing? I certainly don’t.

      #2-3 I may be way off base here, but I look at it from a business stand point. My analogy: A typical merchant is aware of his customers’ decision to pay with credit cards. For the privilege of accepting credit cards, merchants must pay a small proportional fee to the credit card companies. Naturally, the merchant seeks to pass on this fee to their customer. So the merchants mark up their retail prices for all consumers by enough to recoup the fees from credit card sales. Isn’t this the same situation, you have some paying none, some paying normal prices. Mark up the normal prices until it covers for those who are paying none.

      I know the insurance companies aren’t losing money, otherwise they raise premiums. And I would assume if doctors are losing money, they would raise their prices. And the cycle continues..

      #4 Looks like we’re on the same page here. This article only scratches the surface, and like you said, health care needs reform badly. Btw, so are you for or against the mandate?

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