In Sickness and in Health: Health Insurance in America

...In social insurance schemes, then, it is the self-interest of those who do better financially that allows the state to take their money and redistribute it to those who are worse off, and in public assistance schemes it is their altruism that allows such state action...

...Resources that I otherwise might have been willing to devote to "those worse-off if I was sure I'd be better off," Csiszar says, "I will want to keep for myself just in case," and so will be more hesitant to pay a premium of an amount sufficient to help others...

...But this is only one half of the story...

...Instead, individuals will face their own probabilities of responding to each of the various drug treatments for their conditions, depending on how their genetic makeup allows their bodies to transport, target, metabolize, and eliminate the drugs...

...One person (or family) may be poor, as determined by a means test...

...At the same time, the inevitable uncertainty besetting their own portfo48 DISSENT / Fall 2005 HEALTH INSURANCE lios would dampen any altruistic motivation that, otherwise, they might have harnessed for contributing to the savings of others...

...Their doing so saps any motivation they may have to participate in insurance as an altruistic giver...

...The basic impulses of self-interest and altruism that all private insurers have to balance may well be changing so as to contradict the basic assumptions of the private health insurance industry...

...A McGovern/Ackerman-Alstott scheme would not appeal on altruistic grounds because the betteroff would be getting back just as much as the worse-off would...

...Doing so, Graetz and Mashaw say, will eliminate "the risk of encountering an unacceptably steep decline in living standards because of large medical expenses...

...The key here is the growing portion of health care that will be offered presymptomatically, in advance of any distinguishing or contingent symptoms at all...

...First, by calling, public52 DISSENT / Fall 2005 HEALTH INSURANCE assistance style, upon whatever altruism the rich feel for the poor, the government should ensure that "out-of-pocket [medical] costs for the poor [are] fully subsidized with public funds...

...hence, the possibility of redistribution from healthy to sick no longer even exists...

...Nor will the equally distributed unpredictable needs anticipated by traditional insurance entirely disappear...

...Put another way, what is now asymptomatic—not having pneumonia— will become symptomatic, and the symptoms will be ones we almost all know we have...

...Indeed, the logics of both Medicaid and Medicare point in this direction of transforming health insurance into a two-part public assistance and social insurance income-security program...

...An income-security scheme that protects 85 percent of a wealthy person's income from health care expenses, just as it does for a poorer person's, will appeal to the self-interest of the financially better off...

...In reality, the unequally distributed predictable needs contemplated by traditional insurance—insuDISSENT / Fall 2005 51 lin for the diabetic, none for the non-diabeticwill not go away, but they will be joined by a flotilla of equally distributed predictable needs: for preventive care, genetic screening, or surgical or pharmaceutical enhancement...

...Although it is true that the ballooning opportunity for genetic screening will increase the number of predictable medical needs we all face equally, the results of such screening will, in turn, increase the individuation with which we face unpredictable needs...

...Whereas typically the absence of individual symptoms or risk factors for a particular condition means that we each face it with equal unpredictability, here— where the idea is to prevent such symptoms or risk factors—we share the same medical needs with equal certainty...

...The techniques of genetic engineering," Alexander Capron writes, "might be used not merely to bring all people up to a 'normal' level but actually to 'enhance' human capabilities by providing genes not usually found in a particular form in humans...

...In their complementary if half-satisfactory ways, these two doctrines are extremely suggestive...

...But conceptually, they all assume that equality goes with unpredictability and inequality with predictability...

...nor would it be attractive on self-interested grounds, because the betteroff would be getting back less than they gave in the progressive taxes needed to fund the program...

...To the extent that those who know they are better off "agree to enter schemes that they can see in advance will be adversely redistributive from their point of view," Miller writes, they must be motivated by "altruistic sentiments...

...Can the private health insurance system continue to function in such circumstances...

...In many ways, then, as preventive care, genetic screening, and pharmacological, surgical, and genetic enhancement become more powerful and prevalent, our more predictable health-care needs, which private insurance assumes are distributed unequally and differentially over individuals, may become more and more equally shared over whole communities...

...There is no shortage of proposed schemes by which we might effect such a transformation...

...And these are, very much, probabilities, albeit individually specified ones...

...Second, by calling, social-insurance style, upon the self-interest that all people, rich or poor, harbor to protect themselves against income loss, government could ensure that "[n]o family, however high its income, [is] required to spend more than 15 percent of its income on health care in any one year...

...And suppose the United States enacted a new income-security program that assumed that we face, or prefer to face, income unpredictability not in equal but in unequal degrees—in accordance, say, with George W. Bush's proposal to set up "personal investment accounts" in Social Security...

...There is a kind of embodied wisdom to this linking of equality with unpredictability, and of inequality with predictability...

...0 NE QUESTION, however, nags: What if this fundamental intellectual premise underlying private health insurance— that health care arranges itself on a spectrum from unpredictable needs that we face equally to predictable needs that we face unequally— is not the only or even the best principle on which to divide up the universe of medical need...

...EACH OF THESE two halves of the incomesecurity state—social insurance and public assistance—it is commonly said, counts on a particular human impulse to induce the wealthier to accept that some of their income should go to those who are poorer...

...His book The Limits of Medicine will be published next year by Cambridge University Press...

...Only an implicit altruism could explain this...

...The self-interested reason for participating in insurance that emerges when we each face unpredictability equally—as with acts of nature and ailments for which there are no current risk factors—ebbs, certainly, for person A, when A's odds of developing multiple sclerosis are far less than B's...

...Hence references to "population screening," "widespread screening," and "mass screening" pervade discussions of the topic...

...We are living at a moment in which medical technology—prevention, screening, enhancement, pharmacogenetics—is beginning to undermine both the self-interested and the altruistic motivations for the healthy to aid the sick...

...If the bar for what constitutes a healthy human being even rises to include something far less extravagant than "adding a few points to IQ," as the late Dorothy Wertz of University of Massachusetts Medi50 DISSENT / Fall 2005 HEALTH INSURANCE cal School said—for example, "immunity to pneumonia or HIV or flu"—then almost all of us "will fall short...

...Here, the idea is just the reverse: these programs cover needs that are unequally distributed and predictable for any given individual...

...The group collectively has a comparatively predictable and unequally greater likelihood of developing cancer cases...

...according to Klaus Lindpaintner, vice president of research at Hoffmann-La Roche, new "diagnostic approaches— including those based on DNA analysis—will ultimately provide a measure of probability, not of certainty...

...As a group, the former's predictable risk of prostate cancer is greater than in the male community as a whole, even if, within the group, it's not possible to tell which individuals will or will not develop it...

...The catastrophic plan is meant to cover relatively large, unpredictable needs we face with equality, while the Health Savings Account is available for smaller, mostly predictable needs we each face to our own unequal degrees...

...It is self-concern, not generosity, that is said to motivate participation in social insurance schemes...

...To the extent that private health insurance covers risks that we face with equal unpredictability, the motivation for those who turn out to be healthy to help those who turn out to be sick is self-interest: it just as easily could have been the other way round...

...Eighty percent of individuals who test positive for the gene for fragile-X will manifest some kind of mental retardation—what kind lies beyond genetic prediction—but 20 percent never will...

...ANDREW STARK is professor of strategic management and political science at the University of Toronto...

...What if, in fact, our predictable medical needs are coming to be more and more the same, more and more equally held...

...Republicans seem largely content to have the healthy subsidize the poor...

...Not only might a public system have to take over anyway, but it would have to look less like a public version of private insurance, redistributing funds from healthy to sick as in Germany, France, and Belgium, and more like a public income-security scheme redistributing funds from rich to poor...

...And, because need for it does not depend on the contingency of manifesting a symptom, everyone will need it with a priori predictability...

...In June of 2004, the New York Times reported that Baylor College of Medicine had introduced a "pilot program with perhaps the largest panel of prenatal tests ever offered...

...What the two parties' proposals together suggest is that private health insurance should be nudged toward some kind of middle ground between these two functions...

...Rather, to the extent that "you and I have equal, predictable needs," says Julie Taylor of Blue Cross/Blue Shield of Idaho, "where's the sense in my paying for yours or you for mine...

...For their part, George W. Bush and the Republicans have for some time pointed to the tendency for hospitals and health maintenance organizations (HMOs) to take money saved from premiums paid by their healthier clients— that is, patients who don't need much medical care—and use it to subsidize the expenses of the poor...

...accidents and acts of nature will still happen...

...As for privatizing part of Social Security, the ensuing inequality of portfolio sizes would vitiate any self-interested need, or reason, for better-off individuals to continue participating in the larger program...

...By "unpredictable," Rosanvallon means not in a society-wide but in an individual sense...

...Such expenses are predictable and are faced unequally because only those diagnosed with certain symptoms will predictably need insulin...

...As South Carolina insurance director Ernest Csiszar says, individuals with low probabilities of being sick are nevertheless inclined to fix on the possibility, however minuscule: routinely, those with low probabilities of prostate cancer as determined by increasingly sophisticated diagnostic tools seek to treat it aggressively...

...Preventive care, from vaccines to wellness treatments, is increasing as a proportion of all health care, and it is required by whole populations equally, hence predictably...

...Democrats, in other words, identified themselves with the idea that those who are richest—those who contribute proportionately more to the federal treasury via the progressive tax base—should heavily defray the medical expenses of those who are sickest...

...Private health insurance has historically relied on either the principle of self-interest or the principle of altruism...

...With respect to prevention, screening, and enhancement, we are all equally and predictably needy...

...Of course, there are innumerable gradations between the equally faced unpredictability with which accidents may strike and the completely predictable inequality that arises because A has diabetes and B does not...

...the New York Times, the American Medical Association, and many prominent academics have offered such proposals...

...The "number of tests that can be applied to all healthy people," says Robert Pokorski, chair of the American Council of Life Insurance's genetic testing committee, is "limited only by the imagination...

...For $2,000, a pregnant woman will be able to have her fetus tested for some 50 conditions that cause mental retardation...

...The traditional purpose of private health insurance has always been to take premiums paid by the healthy and redistribute them to the sick...

...Now consider those medical expenses we would face, as a consequence of genetic diagnosis and pharmacogenomic therapy, with unequal, individuated measures of unpredictability...

...But they also raise a question: Why not go all the way...

...Because of this, private health insurance has, at least up until now, always been able to call upon both self-interest and altruism to motivate redistribution from healthy to sick—not perfectly, of course, but enough to make for a functioning (if often perilously unstable) system...

...But as genetic and other diagnostic tools and pharmacological and other tailored therapies grow increasingly sophisticated, more and more of what formerly were risks equally unpredictable for the entire community will resolve themselves into unequal degrees of probability for each individual...

...we may well be able to predict that one person out of ten thousand will be hit by a car and so lose earning capacity, but there is no way to tell who will be hit...

...Conversely, to the extent that we know what our health care needs are or are likely to be, then, private insurance traditionally assumes, we face them unequally...

...When it comes to private insurance, apparently, Democrats would have the rich subsidize the sick...

...At the same time, the complementary failures of Medicaid and Medicare as social insurance and public assistance programs are plain to see...

...We will each have our own unique risk profile...

...And they do so precisely because it might well have been the other way around...

...More specifically, private health insurance has always relied on the idea that, to the extent that our health care needs are unpredictable, we face them equally: a spinal injury from a car accident, for example, or the onset of Parkinson's in an individual with no previous warning signs...

...The pattern has been set, Philip Boyle notes, by "people who use [Prozac] absent depression, or men who use Viagra absent impotence...

...On the one hand, there are "social insurance" programs, such as social security or unemployment insurance, which, as the French writer Pierre Rosanvallon puts it in The New Social Question: Rethinking the Welfare State, try to insure those risks to income that share two key characteristics: they are "both equally distributed and largely unpredictable...

...IF SO, THEN WE might have to abandon the idea of health insurance as a means of redistribution from healthy to sick and accept that it too should become a mechanism of redistribution from rich to poor, part of America's income-security programs...

...DISSENT / Fall 2005 53...

...Neither McGovern/Ackerman-Alstott nor a partially privatized Social Security system have gained much political traction in America...

...And that may be because, at the deepest level, programs like these are unable to tap into either the self-interest or altruism required to mobilize support from those who are better off...

...Indeed, the latest innovation in private health DISSENT / Fall 2005 49 HEALTH INSURANCE insurance, the combination of catastrophic coverage with individual Health Savings Accounts, simply highlights this distinction...

...Nor do we do so with the equal unpredictability required to motivate a self-interested participation in health insurance...

...And what if the unpredictability with which we develop other medical needs, far from facing us equally, more and more confronts each one of us with our own, individually differentiated odds...

...Suppose instead that the United States had constructed its income-security state around programs that reversed the equation...

...But private insurance has always resembled public income security in that it, too, relies on linking equality with unpredictability and inequality with predictability...

...Even with the most sophisticated testing, people will confront unequal genetic futures not with predictability, but with newly individual-specific measures of uncertainty...

...On the other hand, state provision also embraces "public assistance" programs, such as cash welfare payments or supplemental security income...

...But now, suppose that A's positive test assigns a high probability to the chance that he or she might be afflicted by a particular condition, while B's negative test assigns a particular low probability to the same chance...

...But it fails as a public assistance program because people of very different income levels pay the same premiums for Medicare Part B (physician services...

...Such risks are unpredictable because they have not yet manifested themselves in a symptom or a family history at the time the insurance contract takes effect...

...We all (as far as one can calculate ex ante) face them equally...

...Indeed, thanks to new developments in medical technology, we are on the brink of an era in which the traditional sine qua non of private health insurance, redistribution from healthy to sick, will make less and less sense...

...For social insurance programs such as social security or unemployment insurance, which handle risks that are more or less "equally distributed" and "unpredictable," that impulse, as Robert Reich says, is self-interest...

...And the more predictable a need is for any given person— the more we can tell who will experience it and who not—the more we face it with interpersonal inequality...

...Here, it is not the very idea of health that would ebb, but the very possibility of insurance...

...Put another way, if you and I both need preventive care of some sort, altruism will not motivate me to pay for yours because you're medically needier than I—you're not—but altruism could prompt me to pay for yours if you're financially needier and can ill afford it...

...Hence the widespread dilemma imposed on those who have to spend down their assets before they become eligible...

...It is true that we face many predictable medical needs—insulin for diabetes, dialysis for kidney disease—unequally on an individualbyindividual basis...

...Even critics of private health insurance buy into these conceptual premises...

...The other half is that our unpredictable health-care needs, which private insurance assumes are distributed largely equally across the whole community, might be growing more and more individuated...

...Viewed as an income-security program, Medicaid is a form of public assistance through which the rich (altruistically) assist the poor, but it is famously unsuccessful as a social insurance program...

...At the same time, Republicans and Democrats are, in their own ways, gesturing toward a new dispensation in which private health insurance becomes a mode of transfer from rich to poor, and hence an income-security program...

...If A has Type I diabetes and B does not, A will need insulin and B will not...

...As Michael Graetz and Jerry Mashaw have written, when social security and unemployment insurance were devised in the wake of the Great Depression, "nearly DISSENT / Fall 2005 47 HEALTH INSURANCE everyone's family income was viewed [as] sharing the same risk characteristics...

...For example, "if we know," says Philip Boyle, a bioethicist at Chicago's Park Ridge Center, that "ibuprofen has some effect on Alzheimer's, large numbers of people will want to take it...

...To the extent that we each make up our own risk category, then we each will be charged a premium that covers our own risk and ours alone, negating any idea of our participating in a broader insurance scheme that embraces others...

...We tend to hold unrealistic expectations about the accuracy and certainty of genetic information," Philip Boyle says...

...Within the group, in other words, there is equal unpredictability, but between the group and the community, there is a predictable inequality...

...But the very fact that they are normal means that we harbor them with community-wide equality and predictability...

...Then, summed over further tests and other conditions, what distinguishes A from B is the unprecedented nuanced individuation with which they each face unpredictability...

...Of course, unlike income-security programs, whose linchpins are redistribution from rich to poor, with private health insurance, redistribution is from healthy to sick...

...Put another way, even if individual health risk profiles are becoming more and more individuated, we still face risks to income with a much more equal, more widespread unpredictability: almost any of us may be unable to meet the cost of any given health need...

...As for Medicare, it indemnifies the elderly rich and poor alike against catastrophic medical expenses, and so succeeds fairly well as an income-security social insurance program, serving the self-interest of the rich, the poor, and everyone in between...

...We need not focus on the more far-out putative enhancements such as IQ boosters or memory-restorers...

...Whatever its actual dimensions, to the extent that this new world comes into being, it will pose serious problems for the possibility of redistribution from healthy to sick...

...A non-diabetic worker in a given workplace will pay the same health insurance premium as a diabetic worker, thereby helping to defray the former's predictable, unequal, higher expense...

...As for needs that are more predictable for any given individual and hence faced with greater inequality across individuals, private health insurance relies on altruism...

...Why not abandon altogether the notion of health insurance as privately managed redistribution from healthy to sick and make it become a form of publicly managed income security, a form of redistribution from rich to poor...

...public incomesecurity programs are apparent in that other major area of the welfare state: private health insurance...

...Similarly, enhancement—whether of the genetic, pharmacological, or surgical kind— will also open up a range of medical services that all of us could claim to need equally and with predictable certainty...

...In practice, most income-security programs blend elements of each...

...Indeed, the point of screening is precisely to discover symptoms, which means that, in many if not all cases, everyone will need it equally...

...THE PRECEDING has been a kind of thought experiment...

...Any given family might have to rely heavily on the contributions of others: this is the essence of the equally shared and unpredictable risks that "social insurance" programs are meant to address...

...Yet it's far from clear that either will work, or work as well, in a world in which our predictable medical needs are ever more equally faced, while our unpredictable needs are faced to ever more unequal degrees...

...Advanced genetics will not only individuate the probabilities with which we face diseases, it will individuate the probabilities with which we will respond to different therapies...

...To consider what this possibility means, let us recall that the income-security components of the welfare state, those dealing with richerpoorer redistribution, typically fall into two categories...

...This propensity, Republicans like to say, functions more effectively as a safety net than anything government could do...

...It fails to insure the rich or the middle class against the income loss that comes from catastrophic medical expenses, requiring them actually to suffer that loss, actually become poor, before they can become eligible for Medicaid...

...Those whose incomes end up not being diminished by job loss or some other unforeseen risk accept that their contributions will go to assist people whose incomes were diminished...

...Consider first that growing range of medical needs we would all share equally: the needs for prevention, screening, and enhancement...

...Suppose one set of programs assumed that, within particular bounds, all members of the community face predictably equal needs for income support—as with George McGovern's 1972 proposal to give every American $1,000 per year or Bruce Ackerman's and Ann Alstott's recent suggestion that the government provide every youth in America a lump sum of $80,000 as a stake in life...

...Insurers, for example, will charge the cohort of seventyyear-old men a higher premium than that of fifty-year-old men...

...Yale's Graetz and Mashaw, for example, argue that "the role of health insurance should be to protect families against two types of risks to income...

...To the extent that we require these services, we do not do so with the predictable inequality that induces those with fewer medical needs altruistically to allow their payments to help those with more...

...The new field of pharmacogenomics, as Aravinda Chakravarti and Peter Little wrote in the January 23, 2005, issue of Nature, "will focus . uniquely and completely upon the individual," but, as an editorial in the same journal also says, the "popular and much-hyped image of a straightforward glide into perfect, personalized medicine is way off the mark...

...It may seem odd to call private health insurance a component of the welfare state, but certainly its proponents believe it to be an adequate substitute for any public health insurance scheme that might otherwise cover the non-Medicaid/ non-Medicare population...

...And anything Medicare doesn't cover —including Medicare Part A's deductible for stays in hospital of more than sixty days—remains out of reach for the poor...

...Nor can the altruistic reason for participating in health insurance emerge easily as long as we're talking about inequality that's merely probable instead of certain...

...Additionally, if and as such enhancement becomes something that we come to regard as a need, it would by definition be something that we would all need (more or less) equally, because it would instill physical traits that none, or very few of us, now have...

...And they are equally faced precisely because—since their faintest glimmerings lie entirely in the future—no one member of the community can be said to bear such risks more than any other...

...As for public assistance schemes, such as cash welfare payments or supplemental security income, which deal with predictable inequality, the political philosopher David Miller has captured the underlying motivation that must be at work for the better-off to contribute to the worse-off...

...The time-honored principle underlying America's public income-security programs has always been to take money from the rich and redistribute it to the poor...

...But we have arrived at a point where, over the next few decades, we will begin holding many other predictable medical needs equally...

...Normal anxiety or normal sexual performance are coming to be considered pathological...

...THESE TENSIONS within U.S...

...What new diagnostic approaches will do is individuate risk profiles to a degree hitherto unseen in health insurance, which thus far has based its premiums either on the different risk profiles assigned to various groups or on the historic certainties (via preexisting conditions) that each medical biography offers...

...It is time now for a national politician—or a party, if that's not too much to ask—to get out in front of this dilatory parade and lead America to where it's headed logically, if not yet ideologically: to a public health care system whose premise is income security, and whose redistribution flows not from the healthier to the sicker, but from richer to poorer...

...In the 2004 election campaign, John Kerry proposed that the federal government clamp a lid on premiums by relieving insurers of most of the expense for catastrophic claims—those that exceed thirty to fifty thousand dollars annually for any given individual...

...The existence, for the purposes of setting premiums, of such groups as "seventy-year-oldmen" testifies to the larger point: the less predictable the onset of any given condition is for any given person—the less we can tell who will experience it—the more equally the risk of it confronts members of the community...

...The same is the case with genetic screening, another service that is offered pre-symptomatically...

...another may be wealthy, as determined by tax returns...

...Such verifiable inequality between them allows the state, through its tax and expenditure activities, to transfer funds from richer to poorer...

...Ron Pollack of Families USA, for example, speaks of health insurance participation as being partly "an issue of altruism for a discrete and disadvantaged population," and partly "one of self-interest for a very substantial part of the population...

...If you have the breast-cancer gene BRCAI, your chances of developing breast cancer are 1 percent as opposed to .5 percent for the rest of the population...

...If we are indeed heading, Jai Shah wrote in the July 2003 issue of Nature Biotechnology, into a world "where the complexities of genetic testing . . . are married with those of best drug prescription," then each individual will display his or her own host of risk factors for all diseases and "the issues surrounding [insurance] coverage will be particularly vexing...

...To the extent that enhancement becomes something that we regard as a medical need—as properly falling within the province of health care—it would, by definition, be something we would need predictably, relying as it would not on the contingent presence of symptoms but on the certifiable absence of desired traits...