Tuesday, August 19, 2008

Fifteen days of blogging for health care reform: The opt-out crisis

Guest post by Skylanda.

I was a sophomore in college, abroad, studying marine biology on a beach in Mexico, when my parents called me up to tell me my father was retiring. He wasn’t entirely too young for it, but neither was he quite old enough to qualify for Medicare. But he had worked long years of hard hours, and they chose together to enjoy the next couple of decades at a reduced income rather than merely endure through them with plenty of money. They were very lucky, and planned extraordinarily well; they will live out retirement with a level of wealth few Americans past the boomer generation will be able to expect.

And so, at age nineteen, like middle-class post-teens all over the nation, I got booted off my parents’ cozy medical insurance plan and out into the nebulous world of the marginally insured. They did their best by me for a year or two; they qualified for COBRA, and since I was in college, I qualified too. They quietly paid premiums that - had I had any idea what they cost - I would have refused their generosity for: some three hundred dollars or so a month for a perfectly healthy, low-risk teenager - at the time, I was paying less than that in rent. The only contribution they asked of me was that my father - ever the academic at heart - routinely quizzed me on the expanded meaning of the acronymn COBRA; to this day, I can still reel it off the top of my head: Consolidated Omnibus Budget Reconciliation Act. Of 1986, by the way. But eventually their COBRA coverage ran out too, and they could no longer afford me anyhow, and so I became uninsured.

This did not make me comfortable. I was never an unhealthy kid, but when I did get sick, it was always the weird stuff. I used go nearly anaphylactic to poison oak, and had been on steroids twice for it. In my first year of college half of my face froze up for a month, and I was diagnosed with Bell’s palsy - a sometimes reversible neurological condition that usually affects septugenarian diabetics. I had migraines and a persistent winter cough that turned out to be undiagnosed asthma. We all have a medical oddity or two brewing somewhere in our corporeal selves.

I searched for insurance, in earnest at first. I tried to find organizations to join to gain the advantage of group rates, looked into catastrophic coverage only, considered the university-sponsored insurance until I realized that I would pay through the nose for a plan that would cover about a quarter to a third of the daily cost if I ever did have to be hospitalized. I identified half a dozen sources of free care in the city (by then I had moved to San Francisco), including the clinic I volunteered at to provide free care to other uninsured patients. Every six months or so I would get on a kick about it, make a few dozen phone calls, search the then-burgeoning internet, give it a good try. After a week or so without success I’d give up again, buried in possibilities and paperwork but no actual insurance on the table. Eventually, when I went to work offshore, I signed up for a dirt-cheap maiming insurance policy (I kid you not, that’s what it was called): one million dollars cash if I was physically injured so badly I couldn’t work anymore. That’s the best it got until I started medical school and was forced to pay for health insurance out of my student loan funds. Three years passed during which I had no medical coverage at all.

For the generations known as “X” and “Y”, this is not an unfamiliar story. Most of my friends went uninsured for some period of time, some by choice and some because they could not find or afford coverage. For the most part, it’s a gamble, but a fairly safe one. I was young, healthy, strong, in excellent shape for the most part (putting my thirty-ish self to shame now), and unless I was struck down by a bus or a pernicious cancer, I wouldn’t be drawing as much off an insurance policy every year as I would be paying into it. If I had tried harder, I probably could have found something.

But I didn’t. Like many healthy young people, I faced some barriers, I gave it a good but not Olympic try, and then I opted out.

It worked for me. The worst upshot I faced was a foot fungus that raged out of control - gross, but far from dire in consequence. For the vast majority of the young, healthy, middle-class opt-outs, the outcome is similar: you skimp on insurance for a couple of years, you save yourself some money. Your career picks up, you get a job with benefits, by your mid-twenties you leave those uninsured years behind relatively unscathed.

Let’s set aside for a moment the disastrous consequence for the unlucky few opt-outs who get sick enough to go to the emergency department - even once - without insurance (mostly because the reverberating effect of a single ER bill on credit, savings, and ability to access future care for years down the line is topic for an entire other post). This is about the effect of opt-outs who successfully navigate the uninsured years without incident.

Let’s consider who they are: the opt-outs are the young and healthy. They pay into the system and draw very little out - particularly young men, who aren’t obligated to yearly visits by the need for prescription contraception and generally don‘t like visiting doctors. They form the low-risk end of total risk pool - in general, their premiums support the care of people other than themselves. No wonder so many maintain a certain disinterest in paying ever-increase premiums on services they rarely use: in an individualistic, every-person-for-themselves system, opting out is both feasible and reasonable.

In a sustainable, collective health care system, opting out is neither feasible nor reasonable. Everyone who lives long enough will eventually reach the age where they draw more benefits than they contribute in cash, and as long as the general pool of funds is maintained by a flow of people from all demographics, it’s a relatively stable system. But everyone has to contribute at any given point in time to maintain the system - young, old, sick, healthy, in the relative proportions that they are able - in precisely the manner that Social Security has historically functioned. If only the people that need health services are asked to pay into the pool, premiums become exorbitant; if you pay your own insurance premiums these days, you don’t need me to tell you this.

In America today, we’re watching the collision of two inexorable forces: the aging of the baby boomers out of their working years, and the normalization of the opt-out phenomenon among the young and healthy. The astronomical rise in premiums - twice the rate of inflation in recent years - can be attributed to a multitude of phenomenon, but this is one of them: at a time when a large proportion of the population is drawing heavier and heavier services, the young and healthy are contributing less and less to the risk pool. Not necessarily because they don’t want to (because really, who wants be to uninsured?), but because barriers are so high to entry into the pool. There is nowhere good this path can go.

The solution is thorny but obvious: we need to start treating health coverage like the public good that it is. Even private insurance works on a pooled risk basis, so that illness in the general population directly affects my premiums, even though I’m (still) a (relatively) healthy young person. Every person needs to contribute in the proportion that they are able, such that when the day comes, they will be able to draw what the need from the system. You cannot force people to buy health insurance (really, ask the couple of states that have tried), but you can use the good old IRS - from which no American can simply opt out - to collect, funnel, and redistribute funds through a single-payer system. Through taxes, everyone can be asked to contribute - in the proportion to which they are able, with the right to draw out the goods that they come to need - the same way that we way do for every other public good: education, roads, the national defense. We don’t question that it works - with all the requisite bumps in the road - for those collective efforts.

And if the thought of higher taxes makes you cringe just to hear the words, remember this: you’re either already paying those exorbitant premiums, or someday you will be, or someday you’re going to get one whomping medical bill that will make you wish you were only paying those premiums...eventually, one of these (or both, or all) will happen to virtually every one of us. Whether we choose to pay that into a sustainable collective system or a crashing individualist system…ah, that is the crux of the issue. And that is a topic for another post entirely.

Cross-posted at my blog, Loose Chicks Sink Ships. Please note that all references to patients have been altered and/or fictionalized to protect the identity of those individuals.