Supporters of the president's unpopular health care mandate tax are now trying to justify it on the theory that those who go uninsured later impose large costs on the rest of us through emergency rooms. But the truth is emergency rooms are crowded not by the uninsured, but by Medicaid patients. Far from alleviating the problem, the president's law dumps millions of people into a failed Medicaid system. It's the opposite of reform.
The original purpose of the mandate was not to reduce the costs of uncompensated care, but rather to extract revenue from young, healthy people who go uninsured because they are low utilizers of health care. Legal expert Steven G. Bradbury summarized: "The individual mandate was originally enacted to compel millions of Americans to pay more for health insurance than they receive in benefits as a means to subsidize the costs that the Act's guaranteed-issue and community-rating requirements will impose on private insurance companies."
In other words, a free-rider problem was created by the law's requirement that insurance companies issue a policy to anyone, even after they are sick (guaranteed-issue), at the same premiums as healthy people (community rating). The significant purpose of the mandate was to force people who don't use health care to pay premiums to subsidize these new costs.
Democrats cut a corrupt deal with the insurance industry: the industry would accept expensive regulations in exchange for a mandate forcing millions of new customers to buy their product. That's why the insurance industry - contrary to popular political misconception - advertised heavily in favor of the law.
The newly created, after-the-fact argument that the mandate is about reducing emergency room "free riding" doesn't make sense. If you're uninsured, you're likely to go to the emergency room only in the event of a genuinely serious emergency that would justify paying the bill or facing bankruptcy.
That's not the case for Medicaid patients, whose bills are paid by taxpayers and who are unlikely to have better options than the emergency room because of how badly the program is failing.
A new study that came out last week showed Medicaid patients use emergency rooms twice as frequently as patients on private insurance. "That's because they wait until their symptoms get so serious that they require emergency care," explained David Seaberg, MD, FACEP, president of the American College of Emergency Physicians. "This often happens because they can't find doctors who will accept their insurance, most likely because the reimbursement rates are so low. It isn't fair to say 'don't go to the emergency room' without providing available medical alternatives, which currently are woefully inadequate."
Medicaid pays doctors below-market reimbursements and burdens them with extensive paperwork and bureaucracy. It's not surprising then that a recent survey by the Texas Medical Association found that just 31 percent of doctors in Texas are accepting new Medicaid patients, down from 42 percent in 2010 and 67 percent in 2000. And a separate national survey by the Doctor Patient Medical Association recently found that 49 percent of doctors intend to respond to the new health care law's lower reimbursement rates by not taking new Medicaid patients.
Giving out more Medicaid cards won't translate into actual health care access. According to CBO estimates, the president's law adds 17 million more people to the Medicaid rolls, exacerbating the shortage of primary care physicians and specialists who can afford to take Medicaid patients and adding significantly to emergency rooms' workload.
Medicaid is so broken that surgical outcomes for Medicaid patients are actually worse than for patients who are uninsured - and much worse than for patients with private insurance. A landmark 2010 study from the University of Virginia, "Primary Payer Status Affects Mortality for Major Surgical Operations," found that that surgical patients on Medicaid are 13 percent more likely to die than uninsured patients and 97 percent more likely to die than patients with private insurance.
We needed real health care reform so the least among us could enjoy the same access to care that the rest of us have. President Obama's law failed to deliver it; America still desperately needs health care reform that respects and empowers all patients.