From the Irony Department (Individual Mandate Edition)

March 9, 2012

Comments

Via the LAT: Plaintiff challenging healthcare law went bankrupt – with unpaid medical bills

Mary Brown, a 56-year-old Florida woman who owned a small auto repair shop but had no health insurance, became the lead plaintiff challengingPresident Obama‘s healthcare law because she was passionate about the issue.

Brown "doesn’t have insurance. She doesn’t want to pay for it. And she doesn’t want the government to tell her she has to have it," said Karen Harned, a lawyer for the National Federation of Independent Business. Brown is a plaintiff in the federation’s case, which the Supreme Court plans to hear later this month.

But court records reveal that Brown and her husband filed for bankruptcy last fall with $4,500 in unpaid medical bills.

This is, of course, illustrates the problem of the uninsured population: care is provided but if the patient has no insurance, the costs are borne by the society in one way or another. It also underscores that the choice to purchase is an action in and of itself that has consequences.

h/t: Mark Kleiman.

30 responses to “From the Irony Department (Individual Mandate Edition)”

JKB

March 9, 2012 at 11:08 pm

And there may be a real policy argument to requiring people to carry a catastrophic medical policy or perhaps limit what can be discharged in bankruptcy if they choose not to carry such insurance. However, a catastrophic policy would cost far less than the mandated coverage under Obamacare.

But what we got with Obamacare was mandatory participation in a buying program where those that use a lot of medical services have their care subsidized by the healthy, the young, and others who use less care. In the case of birth control, a non-insurable event given it is a known recurring expense so the mandate is simply for those who don’t use birth control, post-menopausal women, pre-puberty girls, lesbians, males (assuming condom purchases are not covered), to subsidize the expense incurred by women who choose to use birth control (therapeutic prescription is a different issue)
Chris Lawrence

March 9, 2012 at 11:27 pm

I’m not sure this really qualifies as “ironic.” Under the current regime, the debt is dischargable in bankruptcy. Under Obamacare, presumably the plaintiffs would be out the fines for not having insurance AND the out-of-pocket expenses they didn’t pay due to bankruptcy (which, by my math, would be more, pretty much by definition). The penalty for not having insurance (which has Schrodinger-like properties of simultaneously being and not being a tax, depending on what legal argument in its favor seems more plausible at the time, but since it’s enforced by the IRS we’ll call it the former) can be discharged in bankruptcy, just like medical debt or mortgage debt or credit card debt or pretty much anything else except student loan debt.

Indeed, since money is fungible, even if the plaintiffs had somehow been forced to pay for insurance up front in cash, rather than on credit, and that insurance had 100% covered all of their medical expenses (exceedingly unlikely, since Obamacare doesn’t really force people to buy insurance, much less insurance that has a $0 co-pay and $0 deductable), all that would do is just mean that the $4500 in bad medical debt would be $4500 in bad debt to someone else, which would eventually be “socialized” to whoever else had the misfortune to offer them some form of credit, and ultimately the customers of said creditor.
Scott O.

March 10, 2012 at 12:04 am

@Chris Lawrence: You’re argument has merit but I still think it’s ironic. “She doesn’t want the government to tell her she has to have it” but I guess she’s ok with the government telling her creditors that she doesn’t have to pay them.
David M

March 10, 2012 at 1:16 am

@JKB: You’re absolutely correct, if the GOP had chosen to negotiate, it’s likely they could have bargained to include more catastrophic coverage options. You went off the rails with this though:

…program where those that use a lot of medical services have their care subsidized by the healthy, the young, and others who use less care

JKB, I’m pleased to introduce you to modern health insurance. Modern health insurance, meet JKB.

@Chris Lawrence: It’s extremely ironic, as the GOP argument is that not buying insurance only affects the person not buying it, and not society at large. Here we have Exhibit A for that claim passing on her medical bills to everyone else.
Anonne

March 10, 2012 at 1:23 am

She precisely makes the case for the individual mandate (and even more so for single payer systems), not against it. Do we really want families going bankrupt for medical bills and dumping them on the creditors/taxpayers? Why is that kind of freeloading ok? It is not even counterintuitive for so-called conservatives to think that this is ok, it is just dumb tribalism.
Anonne

March 10, 2012 at 1:28 am

@Chris Lawrence:
Remember that the ACA provides subsidies for people who cannot afford insurance. Had she been insured, it would have taken a lot more services for her to have hit $4500 out of pocket costs. Hence, she might not have gone bankrupt, as her out of pocket cost would have been lower. Of course, there are a lot of moving parts here, but the short of it is that had she had insurance, that $4500 cost would have been bargained for and paid for, and all she would have to worry about is her deductible and coinsurance, which are far less likely to make one insolvent.
Loviatar

March 10, 2012 at 2:52 am

In the La Times’ comment section, lat0001 makes a salient point regarding Ms. Brown’s bankruptcy.

Note that the $4500 is for UNPAID medical bills. The article does not state the TOTAL amount that was incurred for her husband’s medical problem. If his problem required hospitalization, the TOTAL bill would have been much, much more. This implies that they paid the rest of the medical bills — which left that much less for their other debt and/or became part of their credit card debt.

Thus the medical bills could well be a significant factor that caused the bankruptcy.

———-

Plaintiff challenging healthcare law went bankrupt – with unpaid medical bills

But court records reveal that Brown and her husband filed for bankruptcy last fall with $4,500 in unpaid medical bills. Those bills could change Brown from a symbol of proud independence into an example of exactly the problem the healthcare law was intended to address.

*my emphasis
JohnMcC

March 10, 2012 at 3:15 am

In the not-to-distant past, she and her husband and children and pets could have been sold into slavery to pay for a debt, honorably incurred and not paid. So there’s that.

In the even more recent past, she and her husband and children could have been refused medical care because of a history of non-payment. But there was a Federal Law passed by that Republican Party and signed by that Reagan fellow called EMTALA that said we couldn’t do that any longer. So her husband’s dead body will not lie on a sidewalk in their hometown as a warning to people who intend to skip out on debts to hospital.

So what we are left with is a problem of finding out how we can accept the burden of people who need (or don’t need but think they do) medical care but have serious problems paying for it. Now it’s probable that Mr Romney could pay out of pocket for a kidney transplant. But most of those who are likely voters for Mr Romney cannot. Should they be considered for kidney transplants? If people band together and pool their risk — yes, they should. If not — no they shouldn’t.

What is so damn difficult about this?

Of course, that ‘selling into slavery’ and ‘dying on the sidewalk’ worked for thousands of years.
Buffalo Rude

March 10, 2012 at 3:40 am

“There was time pressure” to find a plaintiff for the case, Harned said. “And candidly, it is not as easy as it sounds” to find someone.

But you know what is “as easy as it sounds” when you find a potential plaintiff? Doing a search on PACER.
john personna

March 10, 2012 at 7:03 am

@Chris Lawrence:

You are right in a sense, we don’t get to High Irony until we burn our eyeballs with sophistry such as yours.

The obvious story here is that stupid people without medical insurance are not making rational risk assessments.

It was a “personal responsibility fail.”
DRS

March 10, 2012 at 7:07 am

(mean and nasty button turned on)

Another right-wing free-loader who’s so much better than all those other people who need government handouts. And shouldn’t that be “formerly owned a small auto repair shop that went bankrupt and currently existing on government issued unemployment benefits because she ran up huge credit card bills”? Accuracy and all that.

(/mean and nasty button turned off now but it was fun!)
sam

March 10, 2012 at 8:44 am

More irony — her financial difficulties may sink the case in which she is the leading plaintiff, Florida vs. HHS: She may no longer have standing. See, Hurdle for Health-Law Suit.
JKB

March 10, 2012 at 9:11 am

@David M: “…to introduce you to modern health insurance….”

Modern or not, it is not “insurance”, it is a group expense pooling program. Although, they do hide the modest cost of catastrophic medical expense risk-pooling in the program as well.

INSURANCE, contracts. It is defined to be a contract of indemnity from loss
or damage arising upon an uncertain event.

For events which are not uncertain, such as purchasing monthly birth control or allergy medicine, then how can it be insured. Instead, you must pay the total cost of your known expenses plus administrative fees and profit. If you do not pay this amount, then the cost is exacted from someone else in the pool. The medical expense pooling company, in accurately called insurance, will still make its administrative fees and profit, that is why they need the point of the federal gun to force those who budget for their own medical expenses to pay more to pay for others.

Do you want to eat? You’re going to have to budget for food. No one can insure you against the possibility you might need food.

You can buy some kind of food plan — like they have at college eating halls, or diet companies like The Zone offer — but that’s not “insurance.” That’s just you paying for the cost of food, plus production and transportation costs, plus profit.
sam

March 10, 2012 at 9:55 am

@JKB:

in a buying program where those that use a lot of medical services have their care subsidized by the healthy, the young, and others who use less care

And that differs from the usual health insurance scheme how?

Moreover,

In the case of birth control, a non-insurable event given it is a known recurring expense so the mandate is simply for those who don’t use birth control, post-menopausal women, pre-puberty girls, lesbians, males (assuming condom purchases are not covered), to subsidize the expense incurred by women who choose to use birth control

How does this differ in principle from the prescription of statins for those with risk factors for heart disease (and elect to take the medication)? I.e., those who do not require statins subsidize those who do (on your characterization of the prescription of birth control).
Tsar Nicholas II

March 10, 2012 at 10:00 am

I believe the blog author’s interpretation of what constitutes irony ironically is off base. How is it that someone can be deemed a free rider if they’re so negatively affected by an inability to pay medical bills? Not so much of a free ride, is it? Plus given that the penalty under Obamacare is far less than the cost of individual health insurance this whole concept of a federal mandate to deal with free riders falls flat. People who are determined not to purchase health coverage and who are of some means simply will pay the fines. People who are completely destitute would in any event fall under the purview of Medi-caid and related programs.

Incidentally, just how grave of a problem is that of free riders? Is it sufficient to justify a federal mandate under criminal penalties to purchase a product which primarily is for the benefit and protection of the purchaser? If free riders were such a huge problem how is it that the for-profit healthcare companies out there, e.g., Healthsouth, Sutter, CHW, etc., manage to turn billions of dollars in profits each year, despite massive overhead? Keep in mind the vast majority of people in this country already posses health insurance coverage and even when services are provided to the uninsured there often are various avenues of recovery for hospitals and doctors. Workers’ comp. Med pay policies. Standard auto insurance. CGL policies. Insurance bonds. Lien claims. Collections lawsuits.

There’s another way to approach this issue, one that does not involve the federal government getting in touch with its inner Hugo Chavez.

There is a developed market out there for bad debt insurance. Companies sell other companies insurance policies to cover potential losses from unpaid and uncollectible debts. Every industry has available to it bad debt insurance. Even low-margin industries, e.g., fuel distribution, participate in these coverages. The coverage is relatively cheap. It’s offered by private companies which in turn reinsure their own potential losses. There’s no need for Uncle Sam’s backing.

Rather than enact a federal mandate to purchase health insurance — which strategically will be violated in any event by those determined to do so — why not simply allow the private marketplace for bad debt insurance to cover potential losses on the part of hospitals for providing emergency-related healthcare services to uninsured persons who can’t pay their bills? How could that be a worse result than having Uncle Sam take over the entire system with the ensuing and inevitable “mission creep” and decline in quality of services provided?
Ron Beasley

March 10, 2012 at 10:42 am

This is the typical Teatard ideology. Do away with the government except the part that gives me my stuff and I don’t want to pay for that.
Patrick

March 10, 2012 at 10:49 am

It is indeed ironic, but I can’t laugh at these stories anymore.

I am sick and tired of these irresponsible people who make the mandate necessary. When they also happen to be among those who make intelligent debate impossible, weariness becomes anger.
Herb

March 10, 2012 at 10:55 am

@Tsar Nicholas II:

“There is a developed market out there for bad debt insurance. Companies sell other companies insurance policies to cover potential losses from unpaid and uncollectible debts.”

So your answer to the high cost of health care is….credit default swaps? Yikes.

I’m no great fan of the mandate, but most of the suggestions I’ve heard about how to replace are more about giving the Republicans a political victory over Obama rather than implementing a viable healthcare policy.
Ron Beasley

March 10, 2012 at 11:05 am

@Herb: I agree, that is the one of the most asinine solutions I have ever heard.
Steven L. Taylor

March 10, 2012 at 11:25 am

@Chris Lawrence: I take the point about bankruptcy.

However, I don’t think it diminishes the basic irony.
An Interested Party

March 10, 2012 at 11:28 am

There’s another way to approach this issue, one that does not involve the federal government getting in touch with its inner Hugo Chavez.

This дурачок is as regular as clockwork…
Hey Norm

March 10, 2012 at 11:34 am

“…Incidentally, just how grave of a problem is that of free riders?”

A study in Washington State found that free-riders added $900 to the yearly costs of responsible members of society. I would just as soon keep my $900 than give it to people like the auto repair shop owner who doesn’t want anyone to tell her she needs to buy insurance.
Look…do you want to eliminate the mandate of medical facilities to treat everyone regardless of ability to pay? Fine. Because that’s the argument you make when you argue against the PPACA.
bandit

March 10, 2012 at 1:06 pm

@Ron Beasley: Good name calling. It’s a sure measure of your intellect.
Console

March 10, 2012 at 2:31 pm

@Tsar Nicholas II:

Free riders aren’t a problem for hospitals… they are a problem for your premiums. Hospitals have a bit more leeway in raising prices than your average widget maker. The solution to the problem already exists and it isn’t “bad debt insurance.” They just charge people more.
swbarnes2

March 10, 2012 at 3:05 pm

@JKB:

(therapeutic prescription is a different issue)

How so? Did the Blunt amendment that pretty much every single Republican Senator signed make an exception for thereputic birth control, or did it allow companies to refuse to cover anything for any reason, no matter how therapeutic?

Rush Limbaugh hears testimony about a woman who lost an ovary becuase she couldn’t get the medication she needed, and all Rush hears is “I want sex, so I’m an evil slut”. The woman had a cyst the size of a tennis ball, but I haven’t heard a single Republican say “That should not have happened, she should not have had to go through that because her necessary medication was also contraceptive.” Have you?

Catholic bishops, who are among the most prominant voices urging the contraceptive coverage be dropped, have shown through their actions that they are perfectly fine watching women die rather than give them abortions which would save their lives.

So maybe you think that therapeutic contraception should be covered. Good for you. Where is the evidence that Repubicans and conservatives with power think this? Because I see nothing but evidence that they do not care one bit.
JKB

March 10, 2012 at 8:00 pm

@sam:

One take a statins for a diagnosed medical condition. Fertility is not a medical condition. In addition, there are costless methods, i.e., abstinence, to avoid pregnancy.

But the larger issue is, once you are prescribed a medication for an ongoing condition, that prescription is a known cost which should be budgeted for. The initial treatment is insurable but once it becomes ongoing, it is not insurable. It is a known, fixed cost not a insurable risk.

So let’s call it what it is, a pooled cost buying program to subsidize those who routinely use a lot of medical care by taking from those who do not. It is a welfare program mixed up with a catastrophic medical care insurance to maintain the fiction that it is a new welfare program.
Console

March 10, 2012 at 10:22 pm

@JKB:

Did you seriously just write that? Like you actually thought about it, saw nothing wrong just typed it up?

I have medical insurance because if something should happen to me, like I get diabetes, I want the treatments to be covered, no matter what the ongoing cost. That’s what insurance is. The fact that I become a loss for the insurance company is the risk they take in providing health insurance.

See: insurance, concept of
David M

March 11, 2012 at 1:59 am

@JKB: Pregnancy can be a serious medical condition, I really don’t understand how people don’t get that. Your views on abstinence are completely irrelevant and aren’t useful to a discussion about contraception or health insurance. Secondly, plenty of people have known fixed medical costs they cannot budget for. Your idea that health insurance is only for initial catastrophic costs is simply unworkable.
An Interested Party

March 11, 2012 at 2:30 pm

Good name calling. It’s a sure measure of your intellect.

Pots…kettles…stones…glass houses…
David Anderson

March 11, 2012 at 6:59 pm

@JKB:
Regarding JKB’s remarks, I learned that Rep. Peter Fazio, D (OR) last year proposed a Constitutional mechanism for opting out of the Obamacare mandate. To opt out, the prospective insured would be required to waive his or her rights to: (1) Use of a Health Insurance Exchange, (2) Medicaid, and (3) Chapter 7 Bankruptcy. I think it would be sufficient to simply have them waive Chapter 7 Bankruptcy if they refused to purchase at least a catastrophic policy. If you know of other proposals like this, I’m very interested and I’ll pass them along to folks who might be able to implement them.