Health Insurance 101: Why You Can’t Have Your Cake and Eat It Too


President Trump’s week one executive order on Obamacare calls for the following:

To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.

Clearly targeted at the health insurance mandate, this order will come as good news to critics of the Affordable Care Act who have long complained about this mandate on moral and constitutional grounds.  At the same time, while campaigning for the presidency Trump insisted that he wants to retain one feature of Obamacare: the mandate that insurance companies must cover individuals with preexisting health conditions. It’s difficult to see how to square this promise with the executive order; doesn’t a mandate that insurers provide coverage to those with preexisting conditions qualify as a “financial burden?” That said, Trump has been a consistent critic of the insurance industry, and he has explicitly promised that his alternative to Obamacare will be “inexpensive,” and will be “much better for people at the bottom, people who don’t have money.”

I take all of this as a prime example of the sort of bullshit I referenced in a previous blog post, the only word that can describe what Trump is serving up here. In this blog post I’m going to illustrate why I think this is so.  Once again I’m not going to look at the entirety of Trumpcare. I want to look more closely at health insurance,  the primary mechanism that most Americans rely on to pay for their healthcare. To illustrate the illogic of Trump’s position I want to first describe the basics of how health insurance works, begging forgiveness for anyone who finds this overly simplistic. To this end I’m going to set aside any discussion of programs like Medicare and Medicaid and focus solely on a system in which health insurance is the principle vehicle of payment for people seeking healthcare:

(1) Let’s imagine for the moment a country that has no regulations at all on its healthcare system. Insurance company X is a new for-profit insurance provider that is seeking customers.  Company X advertises that it is seeking new customers, and in year one company X is able to sign up 100 new customers, each agreeing to pay $10/year for the coverage that Company X is offering (Note: of course these aren’t realistic figures, but the small numbers will help us avoid getting bogged down by the actual numbers of real-world healthcare systems).

(2) With 100 customers paying $10/year, Company X will bring in $1000 in insurance premiums, money that it will invest and, hopefully, turn into additional capital.  Imagine that company X earns a 10% return on this premium income.  For calendar year 1, company X will have $1100.  Good news!

(3) When customers purchase insurance from company X, they are essentially paying for economic security (i.e. insurance companies are not providers of healthcare; they are corporate agents that pays providers).  Company X is providing customers the assurance that if they are unlucky enough to suffer a health setback that they will be protected financially. But this is important: for Company X to be able to fulfill its promises to its customers, it needs to spend less than $1100 during the calendar year.  Company X will not survive for long if it is regularly paying out more money than it is bringing in. Company X has a financial interest in keeping its expenses down, and so do the customers of Company X. A financial surplus at the end of the year allows Company X to continue offering benefits without increasing the premiums of customers. If the surplus is large enough, Company X might even be able to reduce the premiums in year 2.

(4) When a customer pays his $10/year premium he does so knowing that he may not receive $10 worth of care during that year.  He still pays the premium as a way of ensuring he is protected should he be unfortunate enough to need more than $10 of care.  Company X is confident that most of its 100 customers will not receive $10 worth of care during the calendar year.  The company also knows that a few customers will need more than $10 worth of care, perhaps much more.  Once again, Company X can sustain itself as long as the total amount of money it spends on healthcare for its customers is less than the $1100 it brings in from premiums and investment.

(5) Now imagine that in calendar year 1 Company X ended up spending $1200 on the healthcare expenses of its customers, $100 more than it received from premiums and investments. Not good!  For calendar year 1 the company is operating at a deficit, a real problem for the long-term viability of the company. Company X needs to balance its budget.  To this end, Company X could do one or more of the following in year 2:

  1. Company X could raise premiums on all of its customers.  If the company paid $100 more than it took in during year one, it could balance the budget by raising the yearly premium to $11/year.  The Board of Directors will likely feel the need to address the year 1 loss as well, so they will need another $100 for this purpose.  In year 2, then, the same pool of customers will need to pay $12/year, not the $10/year they paid in year 1. As in year 2, company X will invest this money and hope to reap an investment return that will improve the financial bottom line of the company.
  2. Company X could also try to seek more customers willing to pay $10/year. Important to this approach, the company needs to ensure that additional customers are likely to be those customers receiving less than $10/year in healthcare provision. The financial health of company X is not improved if most of its new customers are chronically ill and likely to incur exorbitant healthcare expenses. To the contrary, adding a larger number of sick, high-cost customers will only exacerbate company X’s financial woes.
  3. Company X could shift its premiums program in a way that charges less to healthy customers and more for those who are more likely to incur significant healthcare expenses.  Sally, the 21 year old afflicted with Crohn’s Disease, will need to pay $15/year to be covered by Company X, while other healthier customers will continue to pay the standard $10/year rate.
  4. Company X could simply opt out of entering into contractual agreements with customers like Sally. Faced with the choice of providing coverage to a chronically ill woman who will always need more healthcare than she is able to pay for, the company could simply say no to this contractual exchange.
  5. Company X could agree to cover Sally but include in the contract a clause that precludes coverage of healthcare expenses related to her Crohn’s Disease.
  6. Company X could also work with healthcare providers, entering into contractual relationships with specific providers (doctors, hospitals, etc.) that provide special discounts to their customers when they rely on these providers for care.

(6) There may be other options than the six I outline above, but note that each of these options offers a different way for Company X to address the problem of cost.  When Company X pursues one or more of these options it is not motivated by greed, callousness, or indifference to the plight of customers like Sally.  Company X needs to ensure that it remains financially viable if it is to be able to fulfill its promises to its customers. It is in the interest of company X to keep healthcare costs down for itself. It is also in the interest of customers of company X that this happen.


Let’s connect this to the real world.  Health insurance remains a critical vehicle for accessing healthcare for many Americans.  Company X is imaginary, but in the real world the plight of Company X is the plight of real insurance providers. Prior to the Affordable Care Act (ACA), insurance companies could control costs by refusing to cover preexisting conditions (#5 above) or by simply opting out of providing coverage to people so sick that they could only harm the financial bottom line (#4). After passage of the ACA, insurance companies were required to provide coverage to applicants without regard to preexisting conditions (“guaranteed issue”). In other words, #4 and #5 above are no longer options for insurance providers.  Supporters of the ACA are okay with this, as is Trump, and as are most Americans (74% of Americans and 62% of Republicans according to one 2016 poll. I’m interested to hear if my conversation partner in this series of posts, Jeff Hammond, agrees with this majority sentiment).

One does not need to look hard to see the problem. Advocates of the ACA support the guaranteed issue mandate as part of a larger system that also mandates that every individual have insurance. As advocates observe, the reform plan needs the individual mandate. Requiring that individuals purchase health coverage is one way to ensure that company X will have a large enough population of healthy people paying their $10/year to ensure that Sally’s chronic health expenses do not overwhelm the system (i.e. #2/above). Absent some mechanism that gets healthy people to pay into the system, the risk is that insurance companies will collapse as more and more Sallys seek coverage that the state says these companies must provide. We want Sally to get the care that she needs, and we want healthcare providers to be compensated for this care; we need healthy people to pay into the system for these things to happen.

Republicans have been markedly vague about how they intend to ensure the financial stability of an insurance system defined by a bipartisan commitment to guaranteed issue. Promising insurance for all without paying the costs associated with this promise is impossible.  You cannot have your cake and eat it too. However imperfect, Obamacare in principle offers a coherent way of addressing this problem.  What about Trumpcare?


On Morality, Prudence, and the Health Insurance Mandate: A Reply to Jeff Hammond


[Note: this is my reply to Jeff’s latest post on healthcare, available here]

Once again, my thanks to Jeff for participating in this conversation. I’m going to focus my attention here on this specific comment from Jeff’s last post:

Nevertheless, EMTALA and the individual mandate may be connected, not for moral reasons, but for merely prudential reasons.

I think Jeff is wrong. My goal in this post is to explain why I think this is so and why I believe acknowledging the moral import of the mandate is important. Let’s first situate this claim in context. Jeff and I agree that there is a solid moral and prudential basis for EMTALA. I appreciate Jeff’s apt description of EMTALA as a “compelled Good Samaritan” mandate.  Remember that Jeff and I support this mandate on moral grounds.  At this point Jeff parts company with the parallel that I draw between EMTALA (a “supply-side” mandate) and the individual mandate under Obamacare (a “demand-side” mandate placed on patients, not providers).  In his view, the individual mandate if it is justifiable at all is so only on “prudential grounds.” The moral logic that we both embrace for compelling emergency care providers to provide uncompensated care does not apply to patients who are the recipients of that care, or so he argues.

I share Jeff’s conviction that prudential reasons offer one basis for justifying the insurance mandate, though one should notice that Jeff himself is not persuaded by the prudential argument. He describes the ACA as a “disaster” because of the unaffordability of the insurance that individuals are required to buy. I know that this is one of Jeff’s major concerns, and not an unreasonable concern to have.  My anticipation of this concern is what prompted my foray last week onto the website to scope out insurance options for my imaginary family of 4, details of which can be found here.  However, I think Jeff overlooks something basic about the moral connection between EMTALA and the individual mandate.

Let’s rephrase the moral logic of EMTALA this way:

It is morally permissible to use the power of the state to compel private healthcare providers to provide emergency health services, even when these providers know that they will not be compensated for this care.

Based on what Jeff has said so far, he affirms this, as do I.  But Jeff does not embrace the moral logic that would mandate that individuals purchase insurance; he sees this as a “demand-side”mandate that does not parallel the logic behind EMTALA. But if this is so then I find the conclusion of Jeff’s latest blog post quite curious, for Jeff himself frames the outcome of the EMTALA mandate absent the individual mandate in explicitly moral terms:

What if the prototypical 28-year old, who hasn’t bought health insurance, because “she never gets sick” and because “the government can’t tell her what to do” gets run over by a bus, and it’s her fault? She’ll accumulate hundreds of thousands of dollars, at least, in medical bills, and if she doesn’t have a six figure net worth, those bills will likely be eaten by the hospital. That’s hardly a just outcome. So, yes, in the abstract, our hypothetical 28-year old should (an “ought,” a moral statement) procure health insurance so as not to be an unnecessary burden on her fellows in the community, even for contingencies (like getting run over by a bus or developing cancer) that she finds highly improbable.

If the logic behind the individual mandate is, as Jeff describes, “merely prudential,” then how are we to make sense of Jeff’s own assessment that forcing a hospital to eat the expenses of the care it provides is “hardly a just outcome?” The moral logic of these supply-side and demand-side mandates is more tightly woven than Jeff’s last post would suggest, and his own language illustrates how this is so. The 28-year old who lacks the foresight to purchase health insurance, or who would simply prefer to spend his hard-earned money on a convertible instead of health coverage, burdens the hospital that will be required to care for him when he crashes the convertible. The 28-year old also burdens the rest of us, indirectly escalating the cost of healthcare. If we already agree it is morally permissible to use the power of the state to compel hospitals to provide uncompensated emergency care to the 28-year old, why should we not deem it just as morally permissible to use this same power to compel the 28-year old to cover himself in the event of an emergency?  

To the extent that conservatives have stereotypically been the forceful defenders of business owners, entrepeneurs, and other actors on the “supply-side” of market exchanges, I find myself in the strangely curious position of being the one who is drawing attention to the disproportionate moral weight being borne by healthcare providers in a system that mandates that they provide uncompensated care but does not mandate that consumers take steps to minimize these costs. The moral logic of the individual mandate recognizes the costs of healthcare as social costs that are borne by communities, not merely individuals.  The uncompensated care that I receive from the hospital is borne by other members of the community, albeit indirectly. My choice to not purchase health coverage does not affect me alone; it affects every other healthcare consumer.  For this reason, there are sound moral reasons to expect me to live up to my responsibilities to other members of our community. In a healthcare system, no person is an island. My decision to refuse insurance affects you.

As for whether or not we treat the financial mechanisms that compels individuals to purchase insurance as a “penalty” (as the law was initially intended) or as a “tax” (as SCOTUS declared it to be), Jeff is correct that I find the distinction to be moot. Whether or not a consumer experiences the government stick as a “penalty” or a “tax,” the mandate survives, and there are sound reasons for us to agree that it should remain so, as long as health insurance is reasonably accessible and affordable for every member of the community. The last qualifier is absolutely critical. Jeff closes his post by arguing that the ACA mandates that ordinary Americans purchase insurance that they cannot afford to buy.  If Jeff is correct, then I agree with him that there are sound prudential and moral objections to be raised of the individual mandate. As Immanuel Kant reminds us, ought implies can. To insist that individuals have the moral obligation to do the impossible is irrational; thus, Jeff correctly draws our attention to this question: is the health insurance that individuals are required to buy affordable? While we may disagree about the means necessary to assure access and affordability, this shared goal provides a path forward for our conversation.

Jeff Hammond on Healthcare, Mandates, and the Importance of Individual Responsibility


This morning Jeff sent me his next contribution to our conversation about healthcare ethics.  I’m posting Jeff’s comments without commentary from me below.  This post is in response to my earlier blog post, available here.

Jeff’s response:

It’s great to continue this conversation with Vic.  It’s always a treat to discuss EMTALA, my very favorite health law statute.

With that said, let’s get to the heart of Vic’s argument.  In the middle of his last post, Vic said that “Jeff and I agree that this [EMTALA] is an example of a legal mandate that we ought to have.”  I agree with this assumption by Vic.  I concur with him that EMTALA reflects a broad bipartisan commitment to a moral judgment – namely that it is indecent for a community to let its most health-compromised members die, or suffer serious bodily harm in their most dire hour of need.  Why did Congress make this decision in 1986, and can it be compared with the latent assumptions found in the Affordable Care Act, particularly about the individual mandate?  (Whoops.  I said that EMTALA was passed in 1989 in my prior post.  It was 1986.)

EMTALA was enacted because emergency departments across the country were not doing their jobs.  They were “turfing” “bums” and others who were unlikely to pay their hospital bills.  An ER might perform a “wallet biopsy” on a patient to make sure that he had insurance or otherwise had the resources necessary to pay his bill, and if he didn’t, then out he went.  This was scandalous.  It was anathema to the general mission of emergency departments all across the nation – to staunch the flow of blood, to patch up the person in a car wreck, to revive the heart attack victim.  In other words, EMTALA calls on hospital emergency departments, particularly those subsidized the federal Medicare and Medicaid programs, to do their jobs and worry about how to pay for the care they give later.  In essence, EMTALA is a kind of “compelled Good Samaritan” mandate.  If the hospital takes the government’s goodies (participation in the Medicare program), then it must actually do its job and provide succor for the sickest in the community.  Providing such succor and care is the essence of a hospital.  It constitutes the hospital’s core identity.

At this point in his essay, Vic does something interesting.  He takes our common ground, our shared appreciation of the mandate in EMTALA that hospitals and physicians provide emergency care, and he extends it past its breaking point.  EMTALA is about what the healthcare supplyside must do.  It must provide the most basic medical care to those in need.  EMTALA has nothing to say about what the healthcare demand-side – the patient – must do.  Nevertheless, Vic tries to connect the mandate in EMTALA to the individual mandate found in the Affordable Care Act.  I think the connection, merely asserted, is inapt.

Nevertheless, EMTALA and the individual mandate may be connected, not for moral reasons, but for merely prudential reasons. It’s a prudent thing for the government to require you to have health insurance for those times, for example, when emergency healthcare might save your life.  I sure was glad I had great health insurance when my August 2016 ambulance ride + ER visit + impatient hospital admission totaled over $14,000.  Other people in similar situations will be glad that they have health insurance so that they aren’t saddled with unmanageable bills.  Generally speaking, it’s a good idea that hospitals have a way to satisfy the expenses they rack up, and the only way to do this is through the individual mandate.

So, what about the individual mandate on its own terms?  Vic says that “the standard conservative criticism” of the individual mandate is that private citizens should not be forced to purchase a product from a private company.  And I suppose that is true as far as it goes.  But, it’s more than “a standard conservative criticism,” I think.  As the Supreme Court found in National Federation of Independent Business v. Sebelius, the criticism is not merely conservative, but it is rather constitutional.  Therefore, the criticism implicates our most cherished ideals and political philosophical commitments about the proper role and scope of government.  In the NFIB case, the Court held that the individual mandate was an improper use of Congress’s power under the Commerce and Necessary and Proper Clauses, as found in Article I of the United States Constitution.  Congress can do things like regulate railroad rates between states, but it can’t affirmatively force Americans to buy anything, including health insurance (at least under the Commerce Clause).  However, the Court also held that if a person does not do something, like have health insurance, he can be assessed a tax.

In the end, the individual mandate survives.  But it is a softer, more indirect mandate.  It is a mandate representing the sovereign prerogative of the American people to choose how to spend their money – either on health insurance or an a tax payable to the U.S. Treasury.  Some (maybe even Vic) might claim that, because the mandate has survived, Americans are faced with a distinction without a difference – they are still forced to spend money.  I think it can be viewed in a slightly different way.  There are all sorts of incentives that Congress has placed in the federal tax code forcing me to choose to how to spend my money.  Take, for example, the itemized deduction that a taxpayer gets for contributing to a qualified charity.  You can bet that I’ve thought a time or two as the collection plate is passed at church that I’ll be able to take a nice chunk of my contribution off my return come tax time.  Similarly, I and every other adult American, make a choice whether to spend my money buying health insurance or paying a tax to Uncle Sam.

Let me say a word or two about Vic’s coupling of the individual mandate to a sense of personal responsibility.  I’m all for personal responsibility when it comes to a person’s healthcare.  In fact, I wrote a law review article, published shortly after the passage of the Affordable Care Act, that ties Medicare and Medicaid patients with chronic diseases to a responsibility to get their health right or be kicked off their publicly-funded benefits!  Needless to say, at an earlier presentation of this paper at a conference at Marquette University, I did not receive a ringing endorsement of my ideas!

I am a fan of personal responsibility.  I think that, all things considered, a person should take care of himself and his family and should try not to depend on charity or the government to do what he can do himself.  So, if the individual mandate represents the quintessence of personal responsibility, then so be it.  You’ll never find me mimicking a standard ultra-libertarian argument that the sovereign individual should be free from most all pressures, restrains, or orders from the government.  What if the prototypical 28-year old, who hasn’t bought health insurance, because “she never gets sick” and because “the government can’t tell her what to do” get’s run over by a bus, and it’s her fault?  She’ll accumulate hundreds of thousands of dollars, at least, in medical bills, and if she doesn’t have a six figure net worth, those bills will likely be eaten by the hospital.  That’s hardly a just outcome.  So, yes, in the abstract, our hypothetical 28-year old should (an “ought,” a moral statement) procure health insurance so as not to be an unnecessary burden on her fellows in the community, even for contingencies (like getting run over by a bus or developing cancer) that she finds to be highly improbable.

This does not mean, however, that, as a matter of policy, I endorse the Affordable Care Act as a whole with the individual mandate in it.  It’s beyond the scope of this essay, but I have concluded that, as implemented, the ACA is a disaster, because ordinary Americans can’t afford the insurance that the statute mandates they buy.  But, that essay is for a different day.

Our National Shame (or #IamwithReagan)


Today I felt compelled to take a break from my ongoing series on healthcare. The last week has been disillusioning for those of us who have long regarded our country as a haven for those fleeing persecution, not a community beholden to the specters of xenophobia, religious bigotry, and demagoguery.  President Trump’s recent executive order caters to these worst instincts, temporarily barring citizens from 7 majority-Muslim countries, many of these countries ground zero for the worst human rights crises our world faces. Among the many spectacles created by this executive fiasco: a Christian refugee family from Syria with green cards and visas in hand who, after arriving in Philadelphia, was detained before being forced to return to Syria. Let this irony sit heavily on us: our national debate about the proper balance between national security and moral responsibility is occurring on Holocaust Remembrance Day, an annual event in which our country must wrestle anew with its own historical failures to give refuge to victims of moral atrocity.


Perhaps we should not be surprised that collective fear is giving rise to bad policy. We’ve been here before. In 1942 President Franklin Delano Roosevelt issued Executive Order 9066, the first in a series of orders and proclamations that formed the basis for the internment of Japanese Americans during World War II.  Appealing to the need to protect the country “against espionage and against sabotage to national-defense material, national-defense premises, and national-defense utilities,” Executive Order 9066 called for the establishment of military zones of exclusion wherein people could be forcibly removed at the discretion of the Secretary of War or an appropriate military commander. Over the next three years, 110,000-120,000 people, two-thirds of them American citizens were relocated to internment camps. Then as now, fear is a powerful motivator.

Rather than turn this blog post into space for me to vent the anger and shame I feel about our current administration’s path, I’m going to invoke the authority of none other than Ronald Reagan.  In 1988 Reagan signed into law the Civil Liberties Act of 1988. This Act acknowledged the fundamental injustice of the World War II-era internment policy, and it provided for reparation payments to those who were the victims of this injustice.  At the signing ceremony, Reagan gave voice to our collective guilt, affirmed our collective commitment to acknowledging the wrongs borne from fear, and embraced a concrete policy of restitution to those victimized by what we now recognize as a shameful blight on our past:

The Members of Congress and distinguished guests, my fellow Americans, we gather here today to right a grave wrong. More than 40 years ago, shortly after the bombing of Pearl Harbor, 120,000 persons of Japanese ancestry living in the United States were forcibly removed from their homes and placed in makeshift internment camps. This action was taken without trial, without jury. It was based solely on race, for these 120,000 were Americans of Japanese descent.

Yes, the Nation was then at war, struggling for its survival, and it’s not for us today to pass judgment upon those who may have made mistakes while engaged in that great struggle. Yet we must recognize that the internment of Japanese-Americans was just that: a mistake. For throughout the war, Japanese-Americans in the tens of thousands remained utterly loyal to the United States. Indeed, scores of Japanese-Americans volunteered for our Armed Forces, many stepping forward in the internment camps themselves. The 442d Regimental Combat Team, made up entirely of Japanese-Americans, served with immense distinction to defend this nation, their nation. Yet back at home, the soldiers’ families were being denied the very freedom for which so many of the soldiers themselves were laying down their lives.

The legislation that I am about to sign provides for a restitution payment to each of the 60,000 surviving Japanese-Americans of the 120,000 who were relocated or detained. Yet no payment can make up for those lost years. So, what is most important in this bill has less to do with property than with honor. For here we admit a wrong; here we reaffirm our commitment as a nation to equal justice under the law.


No, the victims of our present “mistake” are not fellow Americans.  They are men, women, and children from other countries–victims of civil war and genocide, fleeing violence, looking for a place where they can have the security that my family takes for granted. May the compassionate among us rise up and say enough. May our national shame weigh heavily upon us in this moment. May we turn outrage into action, joining our efforts with the vital work of refugee aid organizations like the International Rescue Committee  and Samaritan’s Purse. Forty years is a long time to wait to admit the mistakes of policies borne from unfounded fear of the Other. Human lives hang in the balance.





On EMTALA and the Moral Logic of Government Mandates


This post is my reply to Jeff Hammond’s blog post, part of our ongoing conversation about healthcare ethics and law.  Jeff’s post is available here.

Many thanks to Jeff for his generous response and his participation in this conversation. Having read Jeff’s first post, I’m uncertain whether or not to call our electronic exchange a “debate.” How far apart are we really? Jeff and I agree that we want a healthcare system that enables people to get the care that they need, admitting that moderate scarcity forces us to grapple with what is possible given these limits. As Jeff says, “Common human decency, I think, demands that everyone have at least some of the care that they require.” I like this, principally because Jeff’s claim describes this commitment in explicitly moral terms.  To have a healthcare system that creates substantial obstacles that inhibit access to care is indecent.

Of course, Jeff observes that this moral demand has been embodied in American law at least since 1989.  I was really excited when reading Jeff’s first blog post that he chose the Emergency Medical Treatment and Active Labor Act (EMTALA) as an example to illustrate this point. In my bioethics course I often use EMTALA as an example of how laws are the embodiment of the moral commitments of communities. Jeff and I, and most Americans I would argue, believe that to deny emergency care to an accident victim who is unable to pay for the care is indecent.  It’s something that emergency care providers should not do.  For this reason, EMTALA coerces emergency care providers, mandating that they must

  • provide a medical screening exam to determine whether or not a patient has symptoms consistent with an emergency medical condition (EMC).
  • provide treatment to patients suffering from an EMC up to the point when the patient has been stabilized.
  • provide transfer to another emergency care provider in the event that they lack the capacity to treat the patient.

Hospitals may do credit checks and may seek payment from patients who are uninsured, but they may not deny access to emergency care if they discover that the patient is uninsured or has bad credit. They also may not provide lower quality healthcare to a patient who they know is unable to pay for the care.

Emergency care providers are well aware that Jeff’s imaginary “bum” will never pay for the care that he receives.  Jeff correctly observes that EMTALA mandates that hospitals provide care but does guarantee that they will be compensated for it. This feature of the law is what gives rise to the “free rider” problem. If I know that a hospital is legally obligated to provide care to me in the event of an emergency, why not dispense with insurance altogether confident that the law will force hospitals to provide care that I won’t be able to pay for?  Hospitals bear the financial burden of this problem most directly.  A December 2016 report from the American Hospital Association notes that American hospitals have provided more than $538 billion in uncompensated care since 2000. Those of us who pay for health insurance bear this cost indirectly as well in the form of higher healthcare costs and higher insurance premiums.

Rather than digging more deeply into the details of EMTALA, I want to step back and extend from where Jeff and I agree to make a larger point about where we may disagree.   If I am reading Jeff correctly, he and I agree that having a “last line of defense” like EMTALA is a good thing. Jeff is correct that I don’t think EMTALA by itself sufficiently describes the conditions of care that I would hope for in a just healthcare system. Surely proper access to care  entail more than that I am able to go to the hospital when I  am so sick that I am facing imminent peril. There are also sound economic reasons for wanting something more robust.  Preventative care is less expensive than emergency care, after all; setting aside the moral question, shouldn’t we all prefer a system that allows easier access to high quality preventative care that will help reduce the need for expensive emergency care?

But setting this aside, let’s return to the moment to this point: EMTALA is a good example of a government mandate that coerces healthcare providers, forcing them to provide care, some of which will go uncompensated.  As Jeff well describes there are good moral reasons for mandating that hospitals provide emergency care, and there was bipartisan political consensus that led to this law’s passage in the 1980s. EMTALA was signed into law by President Ronald Reagan after making its way through a Democratic House and Republican Senate. Jeff and I agree that this is an example of a legal mandate that we ought to have. To not have this last line of defense would be indecent.

Now consider the current debate about the individual mandate under Obamacare.  The Affordable Care Act mandates that every American have health coverage either through an employer, Medicare, Medicaid, or through a subsidized private insurance plan. What about this mandate?  The standard conservative criticism is that it is wrong for the state to mandate that individuals purchase a product (i.e. a health insurance policy) from a private company. Jeff can speak for himself here, but I gather that he himself is critical of the individual mandate on these, and perhaps other, grounds. But this is the point: to the extent that conservatives are already on board with a coercive government mandate applied to emergency care providers (i.e. EMTALA), it isn’t enough to simply say that coercing people to purchase insurance is morally wrong. One needs to explain why this particular mandate is any less defensible than the mandate that hospitals provide emergency care.

But here I can think of many reasons why an individual insurance mandate is defensible in a community like ours that embraces the moral logic behind EMTALA.  The most obvious reasons are financial ones: if the EMTALA mandate gives rise to the free rider problem, an individual mandate is one way to ensure that there are fewer people receiving uncompensated care. An individual mandate also insures that a system that mandates health insurance providers provide coverage to every person (another coercive mandate) has a large enough pool of healthy consumers paying more than they are taking from the system, essential for a stable insurance market.

Beyond these financial reasons if one is looking for an eloquent and compelling moral defense of the individual insurance mandate, one need look only as far as the conservative policy think-tank The Heritage Foundation. In 1989, Stuart Butler, long-time Director of the Center for Policy Innovation at the foundation wrote a position paper defending the idea of an individual insurance mandate in explicitly moral terms (I’ll highlight the relevant portions in bold):

Many states now require passengers in automobiles to wear seatbelts for their own protection. Many others require anybody driving a care to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement.

This mandate is based on two important principles. First, that health care protection is a responsibility of individuals, not businesses. Thus to the extent that anybody should be required to provide coverage to a family, the household mandate assumes that it is the family that carries the first responsibility. Second, it assumes that there is an implicit contract between households and society, based on the notion that health insurance is not like other forms of insurance protection. If a young man wrecks his Porsche and has not had the foresight to obtain insurance, we may commiserate but society feels no obligation to repair his car. But health care is different. If a man is struck down by a heart attack in the street, American will care for him whether or not he has insurance. If we find that he has spent his money on other things rather than insurance, we may be angry but we will not deny him services–even if that means more prudent citizens end up paying the tab.

A mandate on individuals recognizes this implicit contract. Society does feel a moral obligation to insure that its citizens do not suffer from the unavailability of health care. But on the other hand, each household has the obligation, to the extent it is able, to avoid placing demands on society by protecting itself. 

Notice Stuart’s appeals to individual responsibility, “the implicit contract between households and society” that provides moral justification for a mandate.  As long as we are in a society that requires hospitals to provide care in moments of emergency, Stuart’s point is that members of our community have a moral obligation to avoid burdening other citizens when we are the ones in need of care.

Much more to be said here, but this post has gotten long.  Truth be told, this discussion about the individual insurance mandate may become moot.  Recent reports indicate that President Trump may not enforce the individual mandate, though he is inclined to keep the provisions mandating that insurers provide coverage without respect to preexisting conditions. Jeff well knows that this policy combination is a recipe for disaster.  That’s for another post…


Healthcare Ethics: A Reply from Jeff Hammond


My friend Jeff Hammond, Professor of Law at Faulkner University, has agreed to participate in an extended discussion about healthcare ethics and law.  Healthcare law is Jeff’s specialty, so he has a lot of insight to contribute to the conversation.  As I noted in my first blog post in this series, Jeff is more conservative than I am on a variety of issues, including healthcare.  Having read Jeff’s first post, however, we might come to discover that the liberal/conservative labels mask some areas of real agreement.  I’m going to post Jeff’s reply to me without comment, and I’ll link to his personal blog when it is up and running.  Jeff is replying to my post, “Healthcare Ethics: Starting the Conversation.” I hope to extend our conversation with my reply to Jeff’s comments later this week. –Vic

It’s a true pleasure and challenge (!!) to have this virtual conversation with my friend, Vic McCracken.  Vic is making a good name for himself in the theological ethics world.  So, it’s a treat to have a discussion with him as he relaunches his blog and as I launch mine.  This conversation with Vic will be among the first of several posts on my new blog, “A Teacher of the Law”.  Please look for our thoughts, posted here, to be posted there as well (

Now to the task at hand.  In my opinion, it is impossible to fully deal with Vic’s first bullet point in a blog-length essay.  Therefore, I will take up one contemporary example of his premise.  I believe that that a more fulsome answer to Vic’s first premise is found in wrestling with his second bullet point.  That’s for a subsequent blog post.

OK, with those preliminaries out of the way, let me offer thoughts on the first of Vic’s “big ticket” bullet points:

Yes, I affirm, in general, that we (Vic and I) want members of our community to be able to receive the healthcare that they need.  Common human decency, I think, demands that everyone have at least some of the care they require.  I’ve had some health problems over the past few months, and I’ve said the old adage “if you don’t have your health, you don’t have anything,” many times over that span.  I’ve received so much from the healthcare system, that I would have been distressed not to have had the ability to pay for the good care I received.  I want everyone to have the peace of mind that I’ve had while shuttling between hospitals and doctors visits.  And that is why I can agree with President Trump that we don’t want people “dying on the streets”.  The president should know, though, that his backstop (people not dying in the streets) has been codified federal policy since 1989.  The Emergency Medical Treatment and Active Labor Act (EMTALA) allows a person a “medical screening exam,” who, in the words of the law, “comes to the emergency department.”  If an “emergency medical condition” is discovered, then that person is due, under the law, “stabilizing treatment,” which could be quite extensive, and could include surgery and inpatient hospitalization, just to name two examples.

In a sense, and only in a sense, America already has a form of universal care, available to rich or poor, those with “Cadillac” health insurance plans and to those who have no health insurance at all.  To wit: on last semester’s exam in my Health Law class, I asked my students to discuss the federal and common law implications of an emergency room physician throwing a “disheveled bum,” as I described him on the exam, out of her ER.  I wanted my students to be outraged that a physician, ostensibly committed to the ideals of the Hippocratic Oath, could be so callous and mean.  Clearly, my hypothetical ER doc violated the EMTALA law and subjected herself and her hospital to significant legal and reputational liability.  We don’t hear much of hospitals “turfing” “bums” who don’t have health insurance, because such blatant violations of the law put the offending hospital’s Medicare (yet another system of universal care) participation contract in jeopardy.  Medicare is the mother’s milk of any full-service hospital.  If a hospital loses its Medicare participation agreement, that’ll be the day it will shutter its doors.

However, we must recognize EMTALA for what it is: it mandates access but not financial coverage for healthcare goods and services.  To be sure, the protections of EMTALA broke down for my bum, but they did not break down for me.  What if the ER doc in my exam had given the bum loving care?  Even after the first six years of the Affordable Care Act, the bum might not have procured health insurance, and if he’s living on the streets, he probably hasn’t.  Thus, if he got care, the hospital likely would have had to eat his bill.  Ironically, the hospital is more likely to sue the patient who has the resources to pay some, but not all of his bill.  And that is probably the patient about whom Vic is most concerned.

Compare the bum and the working poor person with me.  I’ve taken two ambulance rides and two other car rides to the ER in the past five years, and uniformly, I have received prompt, competent care.  Importantly, I have excellent health insurance through my employer.  I have the financial resources so that in none of those ER visits have I given a second thought to the deductibles I would later pay or the total cost of my hospital visits, which twice included overnight admissions.   The working poor, and even many middle-class Americans, do not have what I have.

Therefore, EMTALA serves as a last line of defense for Americans seeking healthcare, for the law requires that “stabilizing treatment” must be given regardless of the patient’s ability to pay.  However, EMTALA does not create the conditions for care that Vic and those sympathetic to him would likely find sufficient.  For that, we must make some very hard decisions with respect to Vic’s second bullet point concerning scarcity.  More on that later.

Finding affordable healthcare: a closer look


In this extended healthcare conversation on my blog I intend to focus both on the bigger questions (i.e. What are the ideal aims of a healthcare system? What are the standards by which we assess the merits of the different options available to us?) as well as the more concrete face of healthcare in America today.  Yesterday I focused on some big questions.  Today I’m going to focus more narrowly on one segment of the current healthcare system: the post-Affordable Care Act (ACA) market through which millions of Americans purchase their health insurance. Healthcare is expensive. In my biomedical ethics class at ACU I spend several class sessions exploring the topic of justice and healthcare. During this time we jump onto the website to scope out the range of options that are available for consumers.  Most of my college students know very little about the pragmatics of health insurance and the cost of healthcare.  I want students to see in a more concrete way what the ACA does for consumers. I also want them to see some real numbers that cut through the bullshit that politicians throw around to muck up the conversation.

So that’s what I’m going to do on my blog today. Critics of Obamacare argue that healthcare reform has been a disaster. My question: with Obamacare in place, what healthcare options are available right now for a family that does not receive health coverage through an employer?  What are the costs of health coverage for families in this situation? In 2010, 48.6 million Americans were uninsured according the Centers for Disease Control. In 2015 the CDC estimates that this number stands at 28.6 million, and the latest data suggests that 2016 numbers will be even lower. That’s a notable achievement.

So to the question: what options are available for families in the market for health coverage? Earlier this morning I jumped onto the website and created an imaginary family that is going to serve as the basis for comparing healthcare options. I want to do as much as possible to make this a typical American family. My imaginary family consists of 4 persons: a husband (age 43), a wife (age 47), and 2 children (male and female ages 17 and 13). Nobody in the home smokes, and nobody is pregnant. I patterned these details after my own family, save for the fact that I have three children, not two.  I set the yearly family income at $58,000/year, slightly higher than the $56,000/year that was the 2015 median income for US families according to the U.S. Census Bureau. I estimated the yearly healthcare needs for both spouses at the medium level, and both kids at the low level:



Because each state has its own insurance market, I needed to decide the location for this family. I ran my scenario in two geographic locations, my current one in Texas (zip code: 79601) and my former location of residence in western PA where I was born and raised (zip code: 15825). I’m about to present some screen shots from that illustrate some of the healthcare options available for my imaginary family in both places.  I’m also going to summarize some of these details and my own observations.

Let’s start with the family in western PA.  At $58,000/year, my family qualifies for a subsidy that will help to cover the cost of our health insurance.  The subsidy is estimated at $290/month:


What this means is that when I purchase health insurance for my family the state will provide an estimated tax credit that will cover $290 of the monthly cost of the plan.  With this estimate in mind, I then have the option to select from a range of plans that are available on the PA state market, broken into four tiers: Bronze, Silver, Gold and Platinum. These tiers reflect different levels of coverage.  Platinum plans provides more benefit than Gold, Gold more than Silver, and Silver more than Bronze. However, higher levels of coverage also entail higher monthly premiums for my family.  Within these four tiers I need to find a plan that (1) fits my family budget, and (2) provides a level of coverage that I deem acceptable for my family.  Running the numbers for my imaginary family of four, there are 10 plan options spread across the four tiers, with monthly premiums and total yearly costs as follows:

overview-of-plans-15825You will notice that health insurance is not cheap.  In Western PA I have only one Bronze plan to choose from, and it will cost my family $306/month once we factor in the tax credit (i.e. the plan is going to cost me $596/month without the credit). What does my $300 get me?:

bronze-plan-15825 This is a high deductible plan. My family will be responsible for the first $13,900 of healthcare expenses during the calendar year.  Primary care visits, however, will only cost my family $35, and I have a $30 copay for generic drugs. Visit to the emergency room? I’m responsible for the first $13,900 of expenses.  For the entire year I’m guaranteed to pay no more than $14,300 as a family.

What about silver plans?  Here I have a range of options.  Here is one:


Notice that for $65 more per month I’m able to reduce my family deductible to $6000, and yearly out-of-pocket maximum to $11,400. This plan also offers a more robust range of copays ($300 for emergency room care after the deductible, $10 for generic drugs, $30 copay for primary care doctor, and $65 copay for the specialist doctor). I’ll present another silver tier plan option to illustrate some of the flexibility in this tier:

silver-plan-2-15825 For $390/month the family deductible is reduced to $3500 with a maximum out-of-pocket cost of $10,800, and copays reflected in the fourth column. What about gold plans?  At this higher tier I’m able to purchase a plan with a much lower deductible, but at the cost of a much higher monthly premium:


For $554/month my family can purchase a plan that has a $1500 deductible and a maximum out-of-pocket cost of $7000, with copays that cover primary and specialist visits and generic drug purchases.

Finally, the platinum plan:


$1142/month is as much as a mortgage payment for many American families, so this extremely expensive plan will be a real stretch for my imaginary family of 4.  Notice that the deductible is only $500, however, and the yearly out-of-pocket-maximum is just $3,000.  There are low cost copays on generic drugs and primary care. To say it again, healthcare is expensive. Health insurance is expensive too.  However notice that in every one of these plans, my family would be paying $290 more for the plan without the tax credit that subsidizes the cost of care.  

Okay, so now let’s locate this family in west Texas.  First of all, notice that that the estimated premium tax credit is substantially greater for my family in TX than for the same family in PA. This is one feature of this exercise that requires some explanation for someone who knows more about how ACA tax credits are calculated. My question:  Why is it that my family is eligible for a $290/month tax credit in PA but a $1075/month credit in TX?:

estimated-savings-79601With this credit in hand, here is a summary of the Bronze, Silver, and Gold tier options for my family in TX:


Unlike PA, here I have only three tiers of plans, with 18 options across the tiers.  The average cost for silver tier plans is slightly more in TX (about $36/month more), while the Bronze tier is substantially less (nearly $200/month less, likely because PA offers only one bronze tier option). The Gold tier plans in TX cost on average about $70/month more than in PA.

So what do these plans look like?  Consider the craziness of this plan:


With the insurance subsidy, my imaginary family can purchase a high deductible insurance plan-$13,100 deductible and out-of-pocket maximum–for, get this, just $6.19/month.  The plan is essentially a catastrophic coverage plan that offers no benefits until the deductible has been reached. That’s cheap.  Without the subsidy, the plan would cost this same family $1081.53/month.

What about Silver plans?  An example of what’s available for this family in TX:


This is clearly much more expensive than the Bronze tier plan, above.  The advantage here is that I have a lower deductible–$8700 for my family–and primary care and specialist visits are covered with copays.  Generic drugs? No charge.

Finally, a gold tier option for the family in TX:


For $736.25 my family is able to reduce its deductible to just $1500 for the year, with copays that cover primary and specialist visits and no charge for generic drugs. Once again, healthcare and health insurance are expensive. But without the tax credit all of these plans are $1075/month more expensive for my imaginary family.

This post has a lot of numbers, so let me close out by generalizing some observations:

(1) If access to healthcare is a fundamental goal for healthcare systems (as I argued above), then access to health insurance is critical to families that are unable to pay these expenses out-of-pocket, at least as long as we live in a healthcare system where insurance providers are the primary means that consumers use to pay for these costs.

(2) With all of the talk today about repealing Obamacare, it would be helpful for advocates of repeal to lay out for us what healthcare and insurance access looks like for a family like the one I describe above in as much concrete detail as I’m able to offer here.  I want to know: if a family of 4 is able to receive the benefits outlined in the plans above at the prices described, what benefits and prices are advocates of repeal willing to make to this family?  Is the promise that families will be able to receive better benefits at lower prices?  Show it.  I’m open to being persuaded.

(3) No doubt there is more here that needs to be considered. The subsidies that this family depends on for access to care are funded by taxpayers, and the cost of subsidies scales with the escalating cost of healthcare, so there is a level of burden that raises questions of sustainability. I don’t have an easy answer here, so this may be worth returning to in a later post.

The current administration has promised to “broaden healthcare access, make healthcare more affordable, and improve the quality of care available to all Americans.” I’m ready to hear how critics of Obamacare intend to achieve these desirable ends.