Why requiring insurance makes sense for all

Example: protecting sick children

October 3, 2010 

Why require every American to have health insurance?

This mandate in the new health care law is a favorite whipping boy of those who derisively refer to "Obamacare." Republican attorneys general and conservative groups are challenging the requirement in court. Republican campaigns bash it in their advertising.

To understand why they're wrong, and the requirement is necessary, consider the insurance industry's cutoff of children's health coverage in Kentucky and other states.

The new law comes on line over the next four years. The first changes took effect last month. One of them bans insurers from rejecting children who have pre-existing medical conditions. How has the industry responded? By stopping selling policies for children altogether.

Not until 2014 does the mandate take effect that will require all but the poorest to buy health insurance or pay a penalty.

Until then, the industry reasons, people will wait until their children are sick or injured to sign up. The industry is unsure how to underwrite that risk and says the high cost of treating an influx of sick kids would impose undue rate hikes on the rest of its individual customers.

So, insurers, including Humana and Anthem, are pulling out of the small portion of the market represented by children-only policies. (Most kids, as well as most working-age adults, are covered by employer group plans.)

Kentucky Insurance Commissioner Sharon Clark has summoned insurers to explain themselves at an Oct. 13 hearing in Frankfort.

Slamming the door on children hurts the image of an already unpopular industry, but there's a logic to the move.

Insurance works best and is cheapest when the risk is spread across a large pool of people, some sick, most healthy. Health insurance began as a way to share risk and was managed by non-profit companies, but morphed into a source of profits for investor-owned corporations.

Early in the health care debate, President Barack Obama decided that the health insurance industry employed too many people and was too important to the economy to replace it with a government-run single-payer system. So the goal became to cover the 1 in 6 Americans who now lack health insurance within the existing framework of private companies and government health care programs.

Even that conservative approach produced a bloody fight that drained Obama's and the Democrats' political capital.

Meanwhile, the number of Americans who have no health insurance keeps rising. More than 50 million people were uninsured last year, the Census Bureau recently reported. The percent with private insurance was the lowest since the government began keeping track in 1987.

Americans pay more than any other country for health care results that are far from the world's best.

Bringing down costs and improving results, without a government takeover of health care, requires that everyone participate by buying health insurance before they're sick.

A recent poll found that Americans who think the health care law didn't go far enough outnumber 2-to-1 those who say government should stay out of health care. The public understands the necessity for change even if the details are confounding.

The new health care law is not perfect but it's moving us in the right direction. To protect that momentum, voters should look for candidates who want to make health care work better, not those who are out to prove government can't do anything right.

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