The anti-Obamacare grievance machine is in overdrive this week, as outrage grows over the president’s broken promise not to cancel anyone’s health insurance. Even Bill Clinton is now calling on him to delay the phase-out of the worst plans sold on the individual market. And as Obama scrambles to appease angry consumers, the controversy is sparking broader complaints about the essential health benefits that every plan must cover under the Affordable Care Act.
In addition to prescription drugs and hospital care, the 10 essential benefits include a range of services that some consumers may never need. “Men don’t have babies,” goes the new rallying cry. “Why should they have to pay for maternity care?”
Critics are offended at the idea of paying for services they may never need, and their arguments have a common-sense appeal in some quarters. “People who drive a new Porsche pay more for car insurance than those who drive an old Chevy,” Harvard economist and former Mitt Romney adviser Greg Mankiw writes in a Nov. 11 blog post. “We consider that fair because which car you drive is a choice. Why isn’t having children viewed in the same way?” Lori Gottlieb, a self-employed psychotherapist, strikes the same chord in a New York Times op-ed, saying that only a “Kafkacare” system would force her to help sustain “everyone else’s pregnancies.”
Does it make sense to charge everyone for benefits that only some people will use? The truth is, that’s how health insurance already works for most of us. Large group plans have long covered a full basket of services, including maternity care, and diluted the cost by spreading it across the population. By contrast, policies sold to individuals have worked pretty much as Makiw and Gottlieb envision, with every consumer bearing the full weight of his or her own potential needs. The system has worked for some members of the self-employed middle class. But by most objective measures, it’s been a train wreck.
Here’s why: in the old individual market, more than 90% of insurers charged women more than men for the same coverage, a practice known as gender rating. People with known health risks were routinely denied coverage or priced out of the market (only 55% of people seeking individual plans ended up buying them). And when consumers found policies they could afford, their coverage left them exposed to potentially ruinous medical costs. In a study published in Health Affairs last year, researchers found that 51% of all individual plans offered too little protection to qualify for “bronze” ratings on the Affordable Care Act’s bronze-to-platinum quality scale. Less than 1% of large group plans scored that badly, while 65% of them met gold or platinum standards.
By requiring all plans to cover a full range of basic health services, the health care law brings the individual market (which insures just 15 million people) into line with the group market (which insures 149 million). “From now on, people buying individual policies will have the same security as people insured through their employers,” says Sara Collins, vice president for health care access at the Commonwealth Fund. “By standardizing the products, the law ensures that every subscriber gets the full range of essential protections.”
You don’t have to use every covered service to benefit from this arrangement. In practical terms, we all end up more secure when we pool our risks. I may not get diabetes and you may never have a traumatic injury. But if both our plans cover both conditions, neither of us will be bankrupted by either of them. If I lack that coverage, an unexpected illness or injury may empty my wallet and affect yours as well, when your taxes have to help cover my unpaid medical bills.
That’s the whole point of insurance. And though some of us inevitably pay more than we extract, this leveling effect isn’t unique to Obamacare. Our health care system has long subsidized under-insured people by absorbing the cost of care they can’t afford. The new insurance standards could reduce that shared burden, by reducing the number of Americans who can’t cover the costs they incur.
“Society pays the price one way or another,” says Timothy Jost, a health care expert at Washington and Lee Law School—”and the price is often lower when you pay it up front.”
That’s also a good reason for childless people to “pay for everyone else’s pregnancies.” When babies are born with complications that prenatal care could have prevented, we all share in the spectacular costs of rescuing and sustaining them. But there are ethical reasons too. We all have a stake in reproduction: each of us (even Republican economists and self-employed psychotherapists) is the result of a successful pregnancy that a man helped initiate. So why should maternity care be solely a woman’s responsibility? In most of the world’s moral traditions, health and mutual survival are ideals that merit mutual aid. Somehow, mutual aid becomes “Kafkacare” when it has this president’s name on it.