Round 6: On Separating Insurance for Emergencies and for Everything Else

This is The Teacher’s third essay, and the sixth overall, in the debate between him and Vic McCracken over the morality of the individual insurance mandate found in the Affordable Care Act.

This essay was first posted to christianethicsbites, Vic’s blog, here.

Thanks, again, to Vic for participating with me in this discussion.  Slowly but surely, we’re making our points, hopefully clear enough for our readers.

When I read Vic’s response from January 30th, I had a Homer Simpson moment.  What’s a Homer Simpson moment, you ask?  Well, I did not down a couple of doughnuts.  I did not yell at my versions of Bart and Lisa.  Rather, I exclaimed a sharp “D’oh!” when I realized the trap that had sprung about me.  But, I really shouldn’t say that I walked into a trap, for that would imply that Vic cunningly laid it for me.  Vic is far too congenial to take advantage of my oversight like that.  No, I set it for myself.  Rather, his response should be recognized for what it is – a good faith argument in the discussion we’re having using the only “grist” for his mill that he can use – my own words.

In my last blog post I wrote that the EMTALA coverage mandate – that everyone gets “stabilizing treatment” for an “emergency medical conditions” when they “come to the emergency department” can only be prudentially tied to the individual mandate found in the Affordable Care Act.  I then (unwittingly) backtracked and claimed that there was a moral tie between the EMTALA mandate and the individual insurance mandate.

That said, I do want to embellish my January 29th statement that Vic quoted in his January 30th response.  I think these nuances will more accurately reveal my position regarding health insurance and EMTALA.

1. I do believe that if a person faces the contingency of using a hospital or doctor’s emergency services, he should have some way of fully satisfying (paying) the bills that will follow from that emergency encounter.  In the end, everyone faces the contingency of using the hospital or doctor’s emergency services.

1.a.  That is, indeed, a moral claim, as I believe it is wrong to forcibly socialize the costs associated with this person’s (let’s call him “you” for purposes of our discussion) time in the ER.  In other words, if you don’t have some mechanism, whether a check or health insurance or some combinations of the two, to satisfy the bills associated with your emergency care, then those costs eventually will be spread to the rest of us in one of two main ways: higher prices charged by the hospital and/or doctors who treat you and higher health insurance premiums.

In essence, this point says that you should desire to plan ahead for your emergent health care contingencies because of what lies ahead for your fellows if you don’t.  When you go to the emergency room, you will be engaging in an ad hoc, forced transaction.  And both sides of the transaction use “force,” in a sense: the patient will demand the hospital and doctor’s services through the mandate of EMTALA, and the hospital and doctor “force” the financial terms of treatment on the patient.  [N.B.: I’m hoping that our debate will eventually focus on how those forced financial terms –  prices  charged by hospitals and some doctors – bear no reasonable relation to their production costs.  I think Vic and I will share some common ground on this topic.]

Yes, it is true that some patients never pay a cent toward their emergent care.  But, that is the exception and not the rule of contemporary healthcare.  Many, if not most, patients pay something towards their care.  Importantly, hospitals and doctors are keen to make sure that they get paid.  As a culture, we have long since left behind the idea that hospitals are true charities – entities that provide their services to the public for free.  Instead, America has substituted tax-exemption for charity.  That a hospital has tax-exempt status under Section 501(c)(3) of the Internal Revenue Code and similar state and local tax laws means only that the executives, employees, and trustees of the hospital cannot receive a share of the hospital’s operating profits.  It does not mean that the hospital doesn’t charge for its services.  Many times, those charges, as reflected on the hospital’s chargemaster, are not rationally related to what it costs to provide the good or service to the patient.  In other words, often times patients (or their insurers) are charged many times more than the “real” cost for a good or service.  Woe betide the person who does not have health insurance to front these charges.  Even then, some insurance do not fully satisfy the charges levied by hospitals or doctors and leave the patient to pay the rest.

2. Even so, one of Vic’s unstated conclusions in his last essay is: just as it is a moral imperative to procure health insurance to meet one’s health emergencies, it is equally morally imperative to have insurance for every other health issue that a person might face. Now, importantly, Vic might say that this raises a practical distinction without a difference.  In other words, if one has health insurance for emergencies then one has it for every other health issue that a person faces.  And that’s true.  That’s how health insurance works in America.  And that leads to one of the main reasons that health insurance and health prices are so distorted today is that we tend to use our (good) health insurance for everything – for the routine trip to the family doctor so she can see about our coughs and when we are taken to the hospital because we’re run over by the bus.  We use most every other insurance we carry – homeowner’s insurance and auto insurance to name two example – only when something truly terrible happens, like a house fire or serious car wreck.  On the other hand, we tend to use health insurance for everything after we meet our deductibles.

It’s this second moral imperative that I want to quibble with.  EMTALA is built on the premise that it is morally wrong, even indecent, to let one of our fellows to bleed out in the street.  Can we say, though, that it is equally indecent to let a person suffer without a way to pay for a slow-growing cancer or stable gallbladder disease or high-blood pressure or anything else that is serious, yet not emergent?  I don’t think so.  In my opinion it is unfortunate that the health insurance that the individual mandate covers includes one type of insurance for emergency care and for more routine, non-emergent care.  Yes, it is true that emergency treatment is a forced transaction; however, there should not (there’s that moral language again!) be a preference for forced transactions in non-emergent situations.  Forced transactions violate one of the core principles of Anglo-American contract law: freedom of contract. Parties to a contract should be perfectly free to enter (and exit) the contract at will.  I can choose to enter into a transaction with you or not.  Likewise, you can choose to enter into a transaction with me or not.  What makes contracts so wonderful in a capitalistic society is that that the contracting parties have thought ahead of time about the benefits and burdens they will accrue by engaging in the transaction, and after deliberation, they do it anyway because they think on balance the transaction will help them.  [N.B.: I’m in my tenth year of teaching the first year course in Contract Law to my home institution’s law students.  I’ve thought a lot about the moral implications of the “freedom of contract” principle.]

The scenario would go something like this: you have pain in your abdomen.  You go see your doctor.  She orders some tests, and after interpreting the tests sends you to a specialist.  The specialist orders more sensitive tests herself, then sits you down and tells you that you have a Stage II cancer growing in your belly.  You’ll need a combination of surgery, chemotherapy, and radiation therapy to hope to get all of it.  You have no health insurance.  In fact, you’ve had to exhaust your meager savings and then go hat in hand to your in-laws to scrape up enough money to see the doctors and get their fancy tests.  You’re in a pickle.  By yourself, you have no way to pay the hundreds of thousands of dollars in hospital, doctor, pharmacy, and other outpatient charges that it will take to get you well.  The Affordable Care Act has obliterated the pre-existing condition barrier to getting health insurance (in the individual market), so you could go out and get insurance, if you could find a willing insurer in your state and could pay the monthly premium and the deductible.  However, in your financial situation that’s iffy.  Perhaps your better option would have been to plan ahead to buy health insurance before you got sick.

So, you don’t have health insurance.  But that was the choice you made.  The individual insurance mandate tells you to buy insurance or pay a penalty (tax).  What the individual mandate really tells you is to buy health insurance (something good for you) or the government will tax you.  The individual mandate is a paternalistic impulse backed up with government’s monopoly of force.  On the other hand, I tell you to buy health insurance or don’t buy health insurance – it’s none of my business what you do with your own money.  But if you don’t buy insurance, you should not expect society, with the force of government behind it, to backstop your imprudence of not planning ahead for your care.

Well, this blog post is getting long in the tooth.  So, let me wrap it up.  Here is my bottom line: (1) I agree with the moral imperative of EMTALA that, as a society, we should not let a person die outside the ER’s front door.  (2) I also think that it is wrong for a person not to have some sort of way to pay for the inevitability of finding himself in some sort of emergent situation, because if the patient doesn’t pay for it, society will in the form of higher hospital and/or physician charges and/or higher insurance premiums.  (3) Perhaps the easiest way to rid myself of this conundrum is through the vehicle of the individual mandate.  (4) I’m more ambivalent about forcing people, through things like Congress’s individual mandate, to buy insurance to pay for their routine, yet non-emergent healthcare.  People have the freedom to do what they want with their money, and if they don’t want to plan ahead for their healthcare, that’s their choice.  By the same token, society should not have to bail them out when they get a devastating diagnosis.

I fully realize that an obvious criticism of my distinction between emergent and non-emergent healthcare is this: the patient with the Stage II cancer diagnosis will eventually become emergent, so just agree to the individual mandate now and be done with it.  While that argument recognizes that many (most?) healthcare conditions are on a continuum from manageable to quite severe, it does not fully consider the distaste that conservatives, classical liberals, and libertarians have for “forced associations”.  There is a deep and abiding reticence, even abhorrence, in these groups for being told what to do, with whom they should/must make contracts, and how they should/must spend their money.  [I thank Roger PIlon of the Cato Institute for the phrase “forced associations”.  He spoke at Faulkner Law on January 31st.  I asked him the question about the individual mandate for emergent patients.  He and I had a nice discussion in which he used the phrase “forced associations”.  You can see that I have used the phrase “forced transactions”.  They are the same thing, I think.  This blog post is, in part, working out my thoughts after my brief discussion with Dr. Pilon.]

Perhaps, in the end, our discussion about insurance mandates and healthcare must come down to a national moral consensus on values.  If the individual mandate is to be repealed by this Congress and President Trump, then the pre-existing coverage mandate will also have to be repealed.  We will then have to become comfortable with an idea voiced by Roger Pilon: we will have to be OK with people dying.  If we’re OK with some people dying, then freedom of contract and the person’s sovereign choices can be fully vindicated.  If we’re not OK as a society with persons dying, then the individual mandate with societal backstops will be kept.

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