Medicare Works – In Part – Because of the Individual Mandate

A Lesson Conservatives Will Never Learn

As health care reform stumbles and bumbles towards its inevitable implementation attention is once more turned towards the individual mandate, the requirement that everyone have some form of insurance.  The rationale, as Paul Krugman and others continually point out is that for insurance to work everyone, the low risk and the high risk individuals must be in the system.

At the most fundamental level, you can’t guarantee adequate health care to everyone unless the people who don’t need help right now — the young, healthy, and affluent — are induced, one way or another, to contribute to the care of those who do need help. You can do this purely with taxes, via a single-payer system (and maybe even by having the government act as provider), or you can do it, Swiss or Massachusetts style, via a combination of regulation, taxes, and subsidies. But some way of corralling the lucky healthy into contributing is necessary.

Take a look at Medicare.  To the extent it works it works because the entire 65+ population is enrolled and contributing to the costs.  Most likely Medicare follows the 90-10 rule, 90% of the costs are incurred by 10% of those enrolled.  And those 10% are composed mostly of the really old, the 80 year old plus.  But by having the 65 to 79 year old healthy enrollees the costs are spread over a large base.  And those healthy 65 to 79 year olds have health insurance, so the unlucky ones amongst them will be covered.

In short, reality is real.  Conservatives just don’t want to live in the real world.