For the past three days, the political industry has watched with bated breath as the Supreme Court deliberated the constitutionality of Obamacare. Opinions have been voiced, arguments have been weighed, and in all likelihood, no opinions have been changed. The future of American healthcare now lies in the hands of nine politically-connected lawyers with absolutely no public accountability. I have been told that this is compatible with American Democracy.
U.S. Supreme Court
The main issue at hand, of course, is whether or not the federal government has the constitutional authority to force its citizens to purchase a product against their will. In the interest of full disclosure, I will state now that I feel that the federal government has no such authority under the Constitution. Indeed, in my opinion, all government intervention in healthcare, Medicare and Medicaid included, is unconstitutional, though this is not the issue which I will treat here. Instead, in keeping with the mode of this publication, I would like to raise an issue which, not surprisingly, is conspicuously absent from the discourse of our mainstream political commentators – is guaranteed issue, a central component of Obamacare, compatible with the concept of insurance?
Guaranteed issue, as proposed in the act in question, states that no individual shall be discriminated against in the purchase of insurance due to a preexisting medical condition. This is a very compassionate stance indeed, and one that is supported by upwards 85% of American citizens (CBS News). Given the absence of critical thinking amongst the bulk of our population, this figure is not surprising. What the proponents of guaranteed issue fail to recognize, however, is that discrimination is essential to the very nature of insurance.
For those of you who may be unfamiliar with an explicit definition, insurance is the transfer of risk between two entities in exchange for payment. The price of this risk transfer is determined by the likelihood of a given occurrence, as evaluated by both parties. At this point, I would like to remind the reader that discrimination is the process of perceiving differences in and between entities; this process is exactly that which the insurance company must perform in determining the proper rate for a given level of insurance.
Let us take an example. Consider two individuals, one who smokes and one who does not, interested in purchasing insurance against lung cancer. The insurer, in evaluating these two cases, recognizes that he is taking on a greater risk by insuring the smoker than by insuring the non-smoker. To this end, he discriminates, that is, recognizes the differences, between the two individuals, in order to arrive at a suitable level of compensation for his services. Without the process of discrimination, the assumption of risk cannot be adequately evaluated. If the risk cannot be adequately evaluated, insurance cannot be adequately priced, and the process falls apart.
There has been some discussion, amongst our political commentators, as
to whether or not the individual mandate is separable from Obamacare. These pundits suggest that certain components of the bill may yet pass through the Supreme Court, even if Obamacare is struck down as a whole. I have already made it clear that I believe the entire concept of government intrusion in healthcare to be unconstitutional. The constitutionality of the bill, however, is not the core issue at stake.
Though I do not have the figure in front of me, I believe that upwards of 80% of Americans pay for their healthcare through some type of insurance. If the process of purchasing insurance breaks down, as is ensured by guaranteed issue, a majority of Americans will be without a manner in which to obtain affordable medical care; the likely response will be total usurpation of the system by the federal government. In the end, should Obamacare pass through the Supreme Court, piecemeal or otherwise, it will spell disaster for quality health care in America.
The States United 