AMA: Individual responsibility for health insurance helps America’s patients, pocketbooks

A guest column by the American Medical Association, exclusive to KevinMD.com.

A wise physician once said, “Health is not valued til sickness comes.” The same can certainly be said about health insurance.

This concept is at the heart of our current debate about individual responsibility for health insurance coverage. While we hope never to need surgery or chemotherapy or to have an unexpected accident or illness, it’s certain that many of us will. Health insurance helps individuals get the care they need, while spreading out the financial risk for everyone.

Those who choose to be uninsured, exempting themselves from the risk pool, often place the responsibility of paying for their health care on the shoulders of others. If they are faced with a serious illness or accident, they risk bankruptcy. Uninsured families can only afford to fully pay for about 12 percent of their hospital stays, according to a new HHS report. If they can’t pay their bill, the cost of their care is shifted to others. The result: higher costs for everyone. This resulting cost shift is known as the “hidden health tax,” and it is estimated to add about $1,000 a year to the cost of every American family’s health coverage. These are staggering costs, and they are not sustainable.

Whether or not individuals can afford insurance or choose not to purchase it, a lack of insurance is harmful to the uninsured patients themselves. Those without basic health care coverage do not visit doctors regularly in order to stay healthy or to keep illnesses from getting worse. By the time they arrive in the emergency department, they are much sicker than they would have been with access to preventive care, and they are at a higher risk of dying prematurely.

The American Medical Association (AMA) has long supported individual responsibility to purchase health insurance for those who can afford it and subsidies for those who can’t to help remedy this situation. The AMA established policy on individual responsibility in 2006 and reaffirmed it in 2010. This policy does not dictate what specific type of health insurance needs to be purchased, nor from whom it must be purchased. It must contain, at a minimum, coverage for catastrophic and preventive services, and subsidies should be provided to help with the purchase of insurance for those who need them. The AMA has advocated that a high-deductible health insurance plan, in conjunction with a health savings account, could be an option for some individuals and families.

The Affordable Care Act (ACA) includes a provision similar to AMA policy on individual responsibility, which is scheduled to take effect in 2014. The Congressional Budget Office predicts the ACA will expand coverage to 32 million more Americans by 2016. Several of the new benefits included in the health reform law, such as an end to coverage denials based on pre-existing conditions, are only made possible by increasing the number of Americans participating in the health insurance market.

Individual responsibility is not a new concept – it has bipartisan roots from proposals in the late 1980s and 1990s authored by the Heritage Foundation, and it was supported in Massachusetts under the administration of former governor Mitt Romney.

Individual responsibility for health insurance allows patients to take ownership of their health care needs, decreases the number of uninsured — now estimated at 50 million nationwide — and helps make popular insurance market reforms possible. By promoting individual responsibility and increasing the number of insured individuals, we improve the health of Americans and keep hidden costs from being passed along to all of us.

Cecil B. Wilson is President of the American Medical Association.

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  • buzzkillersmith

    Pretty words, totally in synch with the AMA’s economic interests, but it is completely unrealistic that all people will voluntarily buy health insurance. Other advanced countries have figured this out, Dr. Wilson. The truth of the matter is that the best way to ensure all Americans have access to decent basic health insurance is to have the government provide that insurance, as it now does for the elderly. How about that, AMA?

  • soloFP

    The ultimate risk sharing pool would be to insure the entire population with a national health care option. This would not be required but likely could offer Federal insurance that would be accepted nationwide instead of the old fashioned local HMO and networks. Extending Medicare to everyone who wants it and is willing to pay the measly $100-$200 a month premium would solve the insurance problems. Currently dozens of insurance companies simply duplicate services inefficently.

  • http://www.thesecriticalmoments.com/katesbook Kate

    I’m one of those people you talk about, who has been paying ever-increasing health care premiums for over 20 years now. As a self-employed person, I am unable to shop around for more affordable plans because in Connecticut, adult insured individuals are underwritten for pre-existing conditions if they decide to change companies. My health premium now is over $1,500.00 a month and I have no options because I have no choice. I am not a high wage earner and am, quite honestly, close to the edge of breaking with the cost burden of this monthly bill. And I’m not alone, as I look about to peers and colleagues. This is leading to a systemic failure in the United States and there has to be some equitable solution for us all. It is quite telling that the top paid CEO in America today is a health insurance executive. I’ve been responsible and I’ve worked very hard to provide health insurance for my family, but at these rates and with these limited options, I am, along with a lot of other hard working individual out there, at the end of my rope.

    • happyhealthy

      The new health reform bill should help you in many ways. I know it seems to be coming too slowly – but there’s light at the end of the tunnel…

  • Marc Gorayeb, MD

    Shameless propaganda. If mandated insurance were the solution, then the Massachusetts government would not be in the process of planning to fix prices for providers and insurers. Not only has the mandate not stopped exorbitant insurance premium increases, it has made office-based health care unavailable to boot! And observe the inconsistency of AMA’s position: force people to buy insurance coverage for preventive services? On the theory, I suppose, that the average American is too stupid, cheap or reckless to spend their own money on preventive services. We, the AMA, know better than you, the average American. Someone has to stand up for individual liberty, or we’re all going to be Massachusetts residents soon.

  • http://www.causeofhairloss.org Mat

    I think that the fundamental problem is that health insurance is too expensive, when compared against other countries the USA spends way beyond what any other country pays, yet when you look at life expectancy and outcomes it is not better and in many cases worse. The solution is to stop the spiralling medical costs.

    • Vox Rusticus

      As a nation, we indulge in many behaviors that cause chronic and expensive-to treat diseases. We spend hugely on end of life care and on critical care for prematurely-born infants. We drive more and walk less. And we eat differently, both from one another and from citizens of other nations. This is much more than a simple “we spend more per resident than these other advanced nations on health care but have statistically lower life expectancy (at birth, to be exact) than (name your country) ergo something is wrong with our health care system.” That is not necessarily the correct conclusion, it is a non sequitur.

      • http://www.thesecriticalmoments.com/katesbook/ Kate

        I don’t see it only as a societal issue, but one of pure and simple corporate greed. Why are drugs so incredibly expensive in the US? Why is the CEO of an insurance company the top paid executive? Why do they disallow competition across many state borders for health insurance, thus eliminating competition? In my opinion, as a direct result of lobbyists and corporate interests in politics. It is unfortunate, but in my opinion the US is run by corporate interests. It is now becoming the haves and the have nots in the world.

        We have seen throughout the world what happens when people can’t feed their families, from revolts to riots to civil war. What will happen when the working people of America can no longer to provide health insurance to their families? Health care should not be only available to a select few. It should, in my opinion, be available to everyone.

  • Charles A. Pilcher MD FACEP

    Our current healthcare “system” is so broken as to be irreparable. Employer based insurance is no longer tenable. The “elephant in the room” in ALL of my conversations with healthcare leaders is the need for complete reform. We cannot continue with a “system” that – as Dr. Jim Rinertsen says – is like “giving a kid free reign in a toy store when his mother has the credit card.” If we had “food insurance,” would we buy steak or hot dogs? If we had “new car insurance,” would we buy a Kia or a Lexus? And I’ve been a right wing conservative my whole life, but we’ll be bankrupt soon if we continue down this path. Every other developed country has figured this out. Why can’t we?

  • Molly Ciliberti, RN

    Universal healthcare with a single provider is the answer. Yes, Dr. Pilcher, socialized medicine. Why? Because it works and we will pay taxes for something that actually does us good like healthcare instead of wars, drones, bombs and other unhealthy things. Dr. Pilcher, the only ones buying steaks are the healthcare insurance companies top brass; they are reaping the profits of the current system that fails to help us the patients.

    • Charles A. Pilcher MD FACEP

      Hi, Molly!!! What’s Jack up to these days? We agree, but try not to use the phrase “socialized medicine” because it’s too polarizing. Yet it really is the “elephant in the room.” When about 60% of current healthcare dollars go through Medicare, Medicaid, Indian Health Services, and the military — and the public seems to LOVE their Medicare — it’s hard for people to grasp that we already have “socialized medicine.”

  • http://twitter.com/DyckDyck Dyck Dewid

    A seemingly logical presentation, but having shallows footings (builder metaphor cuz I’m a builder).

    This logic consists of requiring my neighbor (taking away freedom) to do or buy something (Insurance) because circumstances could end up where I’m asked (not required) to pay for him (indigent med care).

    First, we MUST have social consequences because we are social. Consequences teach us, albeit perhaps by suffering… until we ‘get it’. We aren’t wise enough as a people to take away suffering by legislating it away. Suffering must go away because each of us learns what we’re doing wrong… not for me to tell you what’s wrong and make you correct it (for my sake).

    To take the issue of ACA forced insurance further, what is the lifestyle profile of the sick person? What are they eating, inhaling, drinking, etc.. Are they getting enough sleep, drinking enough water? What kind of risky activities do they do, i.e. mountain climber, operates machinery, & how do they drive, do they work too hard? Are you an employer putting too much stress on them? Is too much vitamin E, or Ginger, or sulfur in the air ‘bad’ for them… and which, when extended to medical care I may have to foot the bill? Is this something down the road for legislation?

    Do you think this is really all about money? Why can’t it be about our care and mutual respect and humanity. Why can’t it be focused on how much we need to learn about sharing ourselves and our earth… to be a mature and sustainable society. Try this on: “Be are each others health care.” http://bit.ly/9QWp2R

  • happyhealthy

    Single payer may or may not be “the answer” – but right now it is politically impossible in the U.S. Heck, even the moderate policies of the health reform bill were met with protests and outcries. Let’s not let the perfect be the enemy of the good. We need to do something to get everyone health care coverage, and an individual mandate with financial support for those who need it is a step in the right direction. And yes – we also have to work to get health care costs under control. Everyone can do that by looking in the mirror and making changes to keep themselves healthier – stop smoking, eat more veggies, exercise more. It’s not rocket science.

  • Molly Ciliberti, RN

    Hi Charlie, Jack is doing well. I agree that when you say socialized medicine everyone starts screaming and run every which way. We must get our healthcare under control; we have so many without it that really do need it, including tens of thousands of young college grads that are too old to stay on their parent’s plan and don’t get it at their dead end jobs or can’t even find a job. We seem to forget that people get asthma and diabetes and other diseases that they did nothing to cause and it is a “pre-existing” condition and the very thing that they need healthcare for. This is as bad as the old joke that the bank only gives loans to those who don’t need them and won’t give loans to those who do!

    • happyhealthy

      Molly – the ACA health reforms that just passed address the issues you mention (children can stay under their parents’ plan til 26, pre-existing conditions no longer keep you from getting insurance). These benefits are possible because of individual responsibility for health insurance – having more people in the risk pool.

      • http://www.thesecriticalmoments.com/ Kate

        The pre-existing conditions are still underwritten for adults. It is only for children they can no longer be.

  • mikailov

    If I were 58 with several chronic diseases, making $42,000/year as a consultant, then apply for individual insurance and get a letter from Aetna saying I can have insurance but I will need to pay $2,900/mo, do you think that I will take that? NO.
    That is what the new legislation allows, or am I wrong?

    More importantly, the most successful/respected writers on KevinMD are those that write “rebuttals” in the comments section. The lack of such response from a writer who represents the AMA is a bit disappointing. Comments section is a powerful place to make your argument stronger, and a big draw to KevinMD posts.

    Thank you for sharing you view.
    anar

    • http://www.thesecriticalmoments.com/katesbook/ Kate

      This is what I am thinking also, that there will be no limit as to what they can charge you and then they will turn around and charge you if you don’t get the insurance, making it a no-win scenario. And trying to get on the state plan is like jumping through hoops, especially if you are self employed and fall into their wage limit. They still want you to go get notarized letters from your account every week and still they have to spend three months in the review process.

    • Cecil B. Wilson, MD, AMA President

      Mikailov – I’ve consulted with our AMA policy staff – and they have informed me that your 58-year-old with several chronic diseases making $42,000 a year would pay a maximum premium of $3,900 per year under ACA – or $332 per month.

      He’d also be eligible for cost-sharing subsidies to help with deductibles and co-pays. Kaiser Family Foundation has an online calculator so those with similar questions about their own circumstances can check: http://healthreform.kff.org/subsidycalculator.aspx. I hope this is helpful to you.

  • http://www.thesecriticalmoments.com/ Kate

    There are some really interesting comments here that I’ve appreciated. As Molly has stated, disease is not only caused by an unhealthy lifestyle. My husband developed insulin dependent diabetes at the age of 42. He was absolutely not overweight and we eat a very healthy diet and have always incorporated exercise into our daily routine. As I look back, I see a history of adult-onset diabetes in his family, but when you are young you never really understand the connection. Now, some 10 years later, I am forced to keep the same insurance company as I can’t switch it or his medical will be underwritten. $18,000.00 a year on health insurance for my family is, to me, insanity! But yet, I have to pay it or I know we will lose everything if something were to happen.

    What I am struggling to do now is hold onto this healthcare till my son is out of high school, at which time his hopes are to join the Air Force. Having not had insurance when I was a child, I know what it is like to have to “suck it up” and I was determined my kids would never have to and that they could get preventative health care and medical attention when they needed it.

    I’m not asking for handouts or something for nothing. I’ve worked two and three jobs at a time to tie up loose ends financially. I’ve never subjected myself to credit card debt, we don’t take vacations… ever, and have tried to be responsible in my spending. I just want what is fair. How about a straight 10% income tax on EVERYONE and no cutoffs at the $150,000.00 mark? How about a universal system EVERYONE uses that is a straight 20% of their income that EVERYONE uses, politicians, state workers, businesses AND individuals?

    I’d gladly pay out 30% of my income for that as it pans out to what I am paying for health insurance alone right now.

  • http://twitter.com/DyckDyck Dyck Dewid

    If the Medical – Insurance – Government – Pharma complex were not giving us (ignorant, struggling, powerless, faceless masses) a shell game, then why does:

    1. the cost of a day’s chemo billed at $28000, insurance pay $9000, I pay $125 and write-off is around $19000?
    2. the cost of out-patient surgery billed $10300, insurance pay $2200, I pay $450, write-off $7500 (I got a hospital bill for $450 w/o any detail of what costs were for)?
    3. this year my doctor (of many years) denies access because they don’t take my insurance, and refuse my cash payments (& not use my Medicare Advant. insurance)?
    4. Congress have immunity from laws they invoke, having their own insurance and retirement systems?
    5. must insurance and medical billings and accounting documentation be ‘internal’ & vague, complex and not understandable to the average person?
    6. must we give up legal rights to have insurance, e.g. forced arbitration, contract can be changed or revoked by company, must indemnify & defend company, agree to repay them for their mistakes, agree to what they say they cover & how much they say…

    These are only a few examples of lacking transparency and lacking responsibility to the public. This is very fundamental to demonstrating a respect for all. (except one can’t demonstrate it if they don’t have it)

    My views are expanding with reality after being thrown in to Western medicine for the first time with cancer. I have been pleasantly surprised by the caring people I’m enountering. Certainly, there are also financial benefits I’m now receiving (after 30 years of just paying).

    But, medicine & being ill is not all about money. Although it seems to be all about money to Gov, to Insurance, to Pharmas, to PAs, to many-but-not-all, doctors, to many-but-not-all patients.

    Care giver NEEDS care receiver… as much as the reverse. It is a human connection transaction first- with compassion the intent. Any other primary intent conflicts healing and hence does harm & inflicts dis-ease. Transparency needs to be in our system!!!!!!!!

    • gzuckier

      No kidding. I just got a hospital bill for a fairly minor outpatient surgery (general anesthesia); total bill $8k+, insurance pays $2k, I pay $200, $6k hospital discount to insurer. And people wonder why insurance continues to be so popular despite the whopping 3% profit they make.

  • Molly Ciliberti, RN

    Here is another reason that we need universal single payer healthcare in the US. In order to have a democracy you need to have a healthy working literate citizenry. I believe it is in our country’s and our best interest to insure all of our citizens healthcare and an education, because we all reap the benefits.

    • Dyck Dewid

      I respect your opinion absolutely, Molly.

      The heart of the matter is:
      Neither your opinion, nor even a collective opinion of a majority shall have ANY LEGAL BEARING ON MY INDIVIDUAL VALUES AND RIGHTS.

      Democracy can be characterized as the protection of the minority (Abe Lincoln). …after all we are all a minority in some context– although most would not have the strength to acknowledge it by standing alone for their values.

  • http://bit.ly/9QWp2R Dyck Dewid

    The way we learn to live together
    in harmony and happiness
    will come from our suffering,
    collectively.

    Autism, Alzheimer’s, Cancer, and the like
    are gifts from earth intelligence
    to help us to find the way.

    I predict it will not be a government
    nor a medical or corporate way.

    Profound burdens
    which cause hardship
    and pain
    and seemingly endless suffering
    will bring us to the door
    of genuine care for one another.

    it will be known as love.
    and those who receive care
    will teach the caregivers
    what love is.

  • Leo Holm MD

    How in the world can “individual responsibility” and health insurance be sensibly equated? Insurance distributes risk liability to people other than the beneficiary. This is not individual responsibility. In fact, it exacerbates the problem of “hidden costs”. Can anyone think of any costs in medicine that are not hidden? Doctors cannot put their prices out there. Hospitals guard their fee schedules closely. Prescription drug prices are not published. The whole system is made up of hidden costs. And it’s a good thing. Because if any reasonable consumer found out that the person in line in front or behind them payed a different price than they did, simply because of some preordained caste system, they would be really teed off. By supporting the insurance industry “as is”, you are enabling these insurance corporations to jettison the elderly, disabled, sick, veterans, children and poor so that they can directly plunder the working class. What a fantastic deal. Eliminate the risky people in the pool and then siphon wealth off of healthy working people. If they get sick or old, time to get the government to take care of them. If a risk pool is going to be mandated or developed, why partition it the way it is now? This is done solely to ensure profit for insurance and drug companies while shoveling the majority of costs on the taxpayers. Thanks AMA! I’m not sure if I even care if the system goes entirely free market or entirely single payer. Let’s just put an end to the corporate welfare.