A University of Iowa professor says some of the most popular parts of the federal health care reform law can only work financially with the controversial mandate that was upheld by yesterday’s Supreme Court ruling. Ty Leverty teaches classes about health insurance to U-of-I students in the College of Business.
“The principal of having the federal government force me to buy something I might not want does sort of rub me the wrong way,” he says, “but with health care there are clear, collective consequences when people refuse to buy insurance.”
People still expect to get adequate treatment if they get sick or injured, according to Leverty.
“What the individual does is it requires everyone to pay their share,” Leverty says. “It’s basically about ending ‘free riders’ and ensuring personal responsibility, which is why the individual mandate was once regarded as a clearly conservative proposal because it forces people to take responsibility for their own actions and to pay accordingly.”
The other important aspect of the “mandate” is it makes it possible for insurance companies to afford to offer broader coverage, like the popular parts of the federal law which have already taken effect that forbid insurance companies from refusing coverage to people on the basis of a preexisting condition, or because a person has surpassed a lifetime benefit limit.
“The individual mandate is the piece that allows the whole thing to function,” Leverty says.
According to Leverty, there’s been a “market failure” in the health insurance industry and the health care reform law is one way of addressing the problem.
Leverty also says calling health care coverage “insurance” is a bit of a misnomer, as “insurance” is typically something used to “manage risk” and cover a catastrophic event, like having your car damaged in an accident or your home destroyed by a tornado. According to Leverty, Americans use their health care policies as “cash management” — paying for yearly check-ups and routine tests, things that might be considered “regular tune-ups” for the body. Leverty points out people don’t expect their auto insurance to cover “small, random expenses” like replacing a burned out light bulb, yet they expect their health care policy to cover removal of a wart.