Why We Need the Insurance Mandate
We need the mandate. The Supreme Court will rule on Monday, probably and it seems to me they’ve either struck the mandate down or the entire law down. Striking the mandate alone is going to have a number of negative effects on the insured and uninsured, the first of course being that 45 - 50 million people will continue to be without health care. But it is much more complex than that, and we have an example of what will happen without the insurance mandate.
Washington State Health Services Act of 1993
In 1993 when I first began working on the issue of health care as a professional, was the year we passed the most extensive insurance reform law in the nation. As a state we were seeking near universal coverage for the citizens of Washington State. What passed the legislature that year was this:
Waiting periods for pre-existing conditions were effectively abolished and insurers were required to sell policies to anyone who could pay. To attempt to control costs, the law provided for premium caps to be phased in only if competition among insurers failed to moderate increases. It also included mandates that uninsured individuals buy their own policies and that employers pay at least 50 percent of the cost of insuring their workers, and that uninsured individuals buy their own policies.
It sounds really good doesn’t it? But there you see it, the dreaded mandate, one that requires employers (like Wal-Mart) to pay at least 50% of the cost of insuring their workers and that the uninsured buy their own policies.
But as luck would have it by 1995 a new legislature was seated and the individual mandate was repealed and the employer mandate was repealed and what happened afterward should be a lesson to every American.
Within 18 months of the adoption of the law, key features of the Health Services Act of 1993 were repealed. Most notably, the mandate that all citizens of Washington purchase insurance, and employers not only offer insurance to their employees but they pay at minimum of 50% of premiums, was repealed. Legislators left in place new consumer protection provisions, a.) eliminating waiting periods for pre-existing conditions; b.) guaranteeing that an insurance policy would be issued to anyone who could pay. (does any of this sound familiar??, it out to republicans are planning the same thing, even extending the “keep your kids on until they are 26 provision”) It is a great intention, to keep the populace happy, and so not particularly motivated to change congressfolks.
The Cost: The number of insurers writing policies for individuals began to shrink immediately. Higher-risk individuals bought policies that were previously unavailable to them causing premiums to rise, and some healthy people took their chances and dropped their coverage.
Washington’s new health care policy was much like the national bill today, the Health Services Commission, appointed by the governor, was instructed to produce a menu of the types of services that would be required for a basic insurance policy.
There were many;
As I stated above, by 2000 there were more uninsured Washingtonians than when the law was enacted in 1993. In 1993, 11% of Washingtonians were uninsured by 2000 15% were uninsured.
By 2000 only 2 insurers selling individual policies were left.
A onetime open-enrollment period (3 months) was enacted; no waiting period for pre-existing conditions was guaranteed, encouraging consumers who most needed insurance to sign up. (Does this sound familiar to anyone, anyone at all?)
Premiums rose drastically, the high was around 35%.
The two individual insurers left had ceased to write new policies, leaving those who could afford to purchase the policy out of the system.
This also affected small business because premium increases had become too expensive for a small business to afford.
It’s a lesson for the nation, pay attention folks, this is important.
But I fully expect the Supreme Court to strike down the mandate. They have insurance. I wonder though, will those members of the Supreme Court take the blame for the catastrophe that is waiting in the wings if or when the mandate is struck down?