Bettin’ on Scotus, Teile Vier: Whose Subsidizin’ Who?

April 21st, 2012 | Healthcare Reform | Seminars & Publications

Follows my current nominee for the most astute comment by a Supreme Court Justice during the oral arguments:

JUSTICE ALITO: “But isn’t that really a small part of what the mandate is doing? You can correct me if these figures are wrong, but it appears to me that the CBO has estimated that the average premium for a single insurance policy in the non-group market would be roughly $5,800 in — in 2016.  Respondents — the economists who have supported the Respondents estimate that a young, healthy individual targeted by the mandate on average consumes about $854 in health services each year. So the mandate is forcing these people to provide a huge subsidy to the insurance companies for other purposes that the Act wishes to serve, but isn’t — if those figures are right, isn’t it the case that what this mandate is really doing is not requiring the people who are subject to it to pay for the services that they are going to consume? It is requiring them to subsidize services that will be received by somebody else.”

As was the case in Massachusetts where no one gave small business a voice in 2006 – or since for that matter – in whether or not it wanted to be the source of the subsidy for expanding access to the individual market, no one gave young people a voice in the federal Reform either.

Many ask me what my solution to this arbitrary, convenient, capricious and discriminatory approach is. My answer? Merge the large group, small group and individual markets and assess an acturarial solvency charge against the self-insured market to subsidize the merged market. IF, and that is a big IF, we are going to mandate insurance rating rules at the federal level, then the risk associated with that mandate should be fairly spread across the expanded insurance pool.

Final thought for now: No, this does not mean single payor, nothing could be worse.

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