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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