Pinning Down Cost Shifting in Health Care
By Jason Sagall
October 17, 2011
On August 18, the Atlanta-based Eleventh Circuit Court of Appeals found the
Affordable Care Act's mandatory insurance provision unconstitutional by a vote
of 2-1. The dissenting judge, Stanley Marcus, while maintaining that the
mandate for Americans to buy health insurance or pay a penalty is
constitutional, went further to commend Congress for addressing the
"substantial economic problem" of "cost shifting."
"Cost shifting" in the legitimate sense refers to the causal effect on the
market when health care service providers or insurers find ways to compensate
for losses when consumers do not pay their bills. But "cost shifting" in the
pejorative sense that Obamacare supporters use the term has the purpose of
conjuring blame on anyone who—from the outset—does not put his funds into a
health insurance policy and thus does not make them available in an insurance
pool to serve others' immediate economic needs.
These same critics do not confer any credit to consumers for positive economic
"cost shifting" as they spend their earnings in other markets. But that is
incidental in the hypocrisy.
The Emergency Medical Treatment and Active Labor Act requires hospitals to
provide emergency services regardless of citizenship, legal status or whether
patients have insurance or the ability to pay. Yet the same political mentality
behind that 1986 law screams bloody murder today over the reported (according
to 2009 figures) 1.8 percent shift in costs attributed to individuals who
obtained health care services but did not pay for them.
What portion of that 1.8 percent was sanctioned and enabled by the existing law?
What is any entitlement program if not the shifting "from each according to his
ability, to each according to his need?"
From its "shared responsibility payment" to its "guaranteed issue" provision,
Obamacare is cost shifting by design. It is the destruction of individual
accountability—not its achievement, as President Barack Obama would have us
believe.
When push comes to shove, as it did in the way Obamacare was passed, those who
push for socialized medicine do not argue for it on the grounds of economic
necessity or political right or self-sufficiency. Ultimately, they try to shove
it down the throats of Americans based on an untenable moral ideal of self-sacrifice of the individual to the collective—an ideal antithetical to the
wisdom and forethought of America's founders and the limits they built into the
U.S. Constitution.
A person exercises his freedom of choice to refrain, wisely or not, from buying
health insurance. He has an intrinsic and constitutional right to be left alone,
and an obligation to pay for the goods and services he consumes, if and when he
does so, with or without insurance. The only "shifting" caused by a person who
lives under that premise exists in the minds of entitlement seekers or their
political representatives. It takes a detachment from causality and a perverse
sense of poetic injustice to construe those who refrain from "economic
activity" in a particular market as depriving others of their needs and rights.
Americans should pin the blame for cost shifting on government for
institutionalizing it, and then work on real reform.
Jason Sagall is an analyst with Americans for Free Choice in Medicine.
Copyright © 2011 Americans for Free Choice in Medicine. All rights reserved.
For reprint permission, contact AFCM.
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