If we are to have serious health care reform in this country, it will require everybody to have coverage. Universal coverage isn’t just a nicety, or “the right thing to do”, it’s an essential. Without it, real reform won’t be harder; it will, quite simply, be impossible.
The reason is purely economic, and revolves around the other reforms that people seem to take for granted: preventing insurance companies from denying coverage for pre-existing conditions, and preventing insurance companies from rescinding existing coverage due to new illnesses, “technicalities” on the application, and other invented, generally evil reasons. These common insurance industry practices, the ones that lead to big bonuses for insurance company employees that find ways to drop expensive customers, are rightly seen as inhumane, and people assume that any health reform would put an end to them. But in order for that to happen, you absolutely need mandated, universal coverage.
It’s quite simple really: if you don’t mandate coverage, people will choose not to buy insurance until they get sick. Then, since insurance companies can’t deny coverage to anybody, and they can’t cancel coverage, the insurance company will have to pay for all future medical care, despite the consumer not paying any premiums before that point. Sure, the consumer may be on the hook for anything that happened before coverage started, for for chronic conditions like diabetes, there’s plenty of expenses that will come later. The customer saves money, and the insurance company goes under because they can’t recoup the cost of coverage through premiums.
It would be no different than allowing people to buy auto insurance after an accident, or to buy life insurance after they are already dead, with the insurance companies being forced to issue the policy. That’s a fantastic way to put all insurance companies out of business, but not a terribly good way to ensure the long-term health of the industry.
Thus, you need to force people to buy into the system from the beginning, so that they don’t game the system by waiting to purchase insurance. The best way to do that, however, is the question. I don’t think a fine, up to $3,800 as suggested by Sen. Max Baucus, is the way to do it. My preference would be that anybody who does not have other insurance would be automatically enrolled and billed for the public option (yet another reason why a public option is essential). That’s not a fine, that’s just being nudged into a default plan and paying for it.
No matter how you do it, though, mandatory universal coverage is essential if we hope to do away with the worst of insurance company excesses.