The “no free health care” tax: We all pay when the ‘undeserving’ have to grovel for treatment

By Philip Caper
Special to the BDN
February 20, 2014

How much tax would you be willing to pay to make sure somebody who can’t afford health care has to grovel to get it?

I have watched the fight about whether to expand Maine’s Medicaid program (sometimes referred to as “welfare”) going on in Augusta during the past year or so with increasing bewilderment. Many Mainers, including Gov. LePage, seem to be really angry at the idea that “those people” (you know who they are) may get something they don’t “deserve” at taxpayer expense. Yet these angry people seem unwilling to take the step that would really save money by just letting those who can’t pay for medical care die.

Why? I suspect it’s because the overwhelming majority of us still value human life. But they don’t seem to mind making “undeserving welfare takers” grovel.

We all end up paying the bill for their care one way or another anyway, in higher health insurance premiums and hospital and doctors’ charges. That bill is much higher than it needs to be.

Adding it all up, the price of unnecessary administration, avoidable illness, and lack of more effective control of costs that are avoided in the Medicare-for-all-like systems in other countries easily amount to 20 percent of our total health-care spending.

Many people are unwilling to believe you can cover everybody for less than the cost of covering just some, and probably can’t be persuaded otherwise. But it’s still worth trying.

Deciding who is or is not “worthy” of dignified health care turns out to be very expensive. It’s been persuasively shown in dozens of other countries that it costs far less to cover everybody than to spend lots of money, energy and political capital deciding who the “undeserving” are, and then figuring out how not to cover them.

For example, doctors in Maine, required to deal with scores of health insurance plans, spend about three times as much on administration as Canadian doctors with their much simpler single-payer financing system.

Hospitals spend even more, requiring large billing departments, often with hundreds of employees. Insurance companies have large underwriting departments in order to create dozens or hundreds of “risk pools.”

Credible estimates of the money wasted on such unnecessary administration run to about $1,500 per year for every person in the state.

Then there’s the cost of avoidable illness. It’s a well-known fact that people without health insurance often delay seeing a doctor if they think they can’t afford it. This results in many delayed diagnoses that then end up requiring treatments that are far more difficult and expensive than need be.

Uninsured people tend to use emergency rooms that do their best to stabilize patients, but cannot prevent illnesses and injuries from happening in the first place and are not required or equipped to provide adequate follow-up care. Such pent-up demand is most likely what underlies the recent finding that the use of ERs surged among newly insured Medicaid enrollees, who are less likely to have a regular doctor. I expect that it will level off as they begin to receive regular care.

A single pool of funds is much easier to control than our current fragmented system of financing health care. Constraining the flow of money into our current system is like trying to control the flow of a river by building a dam in its delta rather than upstream.

As governments and employers try to restrain their payments into the health-care system, the latest rivulet to expand is direct out-of-pocket payments (co-pays and deductibles) by patients. They too will soon become a flood.

Out-of-control health care costs are eroding our ability to do lots of other important things in both public and private sectors. The complexity of the Affordable Care Act will only make these unnecessary administrative costs grow even more. The tax just went up.

Is it really worth $1,500 every year and rising — to you and every member of your family — to make sure some “undeserving” person doesn’t get “free” medical care?

That’s something worth thinking about.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com