Universal Healthcare: Who Really Pays?

Proponents of “universal healthcare” often assert that healthcare is a right. If so, then healthcare is a rather different kind of right than those of Life, Liberty, and the pursuit of Happiness. We get those unalienable rights from our Creator, or from Nature. But healthcare is a complex array of products and services that must be provided by other people, and they expect to be paid.

Everyone, however, already has a right to healthcare, just like they have a right to food, shelter, and other necessities. Indeed, if a purveyor of necessities refused to sell his goods to certain Americans, perhaps through redlining, he’d have a nice little federal case on his hands. Even so, one still must pay for those necessities.

What the proponents of universal healthcare (also called single-payer or Medicare for all or socialized medicine) really mean by healthcare being a right is that the government should provide healthcare to everyone for “free.” Which means someone else must pay.

Of course, ObamaCare is not universal healthcare; it’s a hybrid of Medicaid for some, government subsidies for others, and a mandate for those who have the money to pay the entire cost of health insurance to do so. And the millions who are left out of ObamaCare can get “free” healthcare at hospital emergency rooms.

Everyone in America, including illegal aliens, can receive “free” healthcare from hospitals that take Medicare patients, which means just about all hospitals. This started in 1986 with EMTALA, the Emergency Medical Treatment and Active Labor Act. With EMTALA, America has had universal healthcare for 29 years.

The problem with EMTALA is that there were no payment provisions; the feds didn’t provide any funding. What that necessitates is that hospitals must charge paying patients more in order to cover the costs of care for the non-paying patients. It’s called “cost-shifting.”

To see the dynamic here, let’s transfer it to restaurants. If the feds required all restaurants to provide free food to those who can’t pay and, like EMTALA, the feds didn’t pay for those non-payers, then eateries would have to charge more than they otherwise would to paying customers. That, or go out of business. In a nifty little article at Forbes in 2012, Dr. Amesh Adalja, M.D. wrote:

One other consequence of EMTALA, also not often mentioned, is that it creates a moral hazard. If a person knows that, because of EMTALA, they will not be refused emergency care despite being unable to afford it, what is their incentive for obtaining insurance? While a person is still legally liable for the hospital charges, many hospitals eventually “forgive” the unpaid debt with minimal repercussions for the individual.

What EMTALA has predictably created is a situation in which emergency care has become viewed as a right to be provided by healthcare facilities irrespective of the fact that to do so nullifies the rights of providers. In creating this false right, EMTALA also fuels the animus of certain individuals against purchasing their own health insurance because the law created an emergency care safety net that is always available.

Perhaps EMTALA is why proponents of universal healthcare think it is a right. But if healthcare is indeed a right, then it is a right that conflicts with the rights of others. In 2011, attorney Jonathan Turley wrote:

EMTALA forces those, who can afford to pay for health insurance, to cover the cost for those who cannot. If the government can mandate that you pay for someone else’s care, why can’t it mandate that they pay for their own care? If ACA [ObamaCare] is unconstitutional, then so is EMTALA.

That last sentence is bracing, because in NFIB v. Sebelius, Chief Justice Roberts wrote that the government cannot command individuals to buy health insurance. However, Roberts’s conclusion with regards to the individual mandate is regarded by some as mere obiter dicta.

Mr. Turley may have mischaracterized EMTALA by claiming that it “forces those, who can afford to pay for health insurance, to cover the cost for those who cannot.” The “force” involved is in requiring hospitals to treat everyone; how the hospitals pay for that uncompensated care is their problem. EMTALA doesn’t “mandate that you pay for someone else’s care.” That’s just what the hospitals do to stay afloat. Hospitals could accept lower profit margins, get leaner and meaner, lay off workers, or take other cost-cutting measures.

One issue in EMTALA is akin to one that was found unconstitutional in NFIB: ObamaCare attempted to condition continued receipt of Medicaid payments to the States on their acceptance of the expansion of Medicaid to yet more non-paying patients, and EMTALA conditions continued receipt of Medicare payments by hospitals on their acceptance of non-paying patients.

It would seem that the case against EMTALA is even stronger than the one against the Medicaid expansion in ObamaCare, because Medicare patients have paid for their care. With EMTALA, Congress was not only threatening hospitals with loss of Medicare payments, they were also threatening Medicare patients with less choice had hospitals opted out of Medicare. And opting out of Medicare is what hospitals should have threatened to do back in 1986. Had hospitals banned together in a mass opt-out, EMTALA might never have come to pass.

Cost-shifting in government healthcare didn’t begin with EMTALA; Medicaid imposes considerable cost-shifting because it pays less than the going rate. Which means private sector payers must pay more. ObamaCare actually doubles down on cost-shifting, as it raids Medicare for $716B over ten years to pay for Medicaid expansion, even though Medicare is already cash-flow negative.

Medicaid is different than Medicare. Medicare has its own dedicated tax, the payroll tax, as well as its own “trust fund.” But Medicaid doesn’t have its own revenue source and is funded by general revenue from income taxes and such. When the Medicare “trust fund” is depleted, adjustments by law must be made, either upping the payroll tax or cutting benefits. But with Medicaid no such moment of truth will ever be triggered; it’s an entitlement. Whereas Medicare is seen as insurance, Medicaid is a means-tested social welfare program. So when ObamaCare raids Medicare to pay for Medicaid, it’s taking from insurance to give to welfare. But Democrats now say that those on Medicaid are “insured.”

Hoover Institute Fellow attorney Richard A. Epstein expands on EMTALA in his book Mortal Peril: Our Inalienable Right to Health Care? You can read his take on EMTALA at Google Books, beginning on page 91. Lucy Hornstein, a family physician, provides insights with a bit of humor in “Challenge the constitutionality of EMTALA.” In “Is EMTALA Constitutional?” the publisher at Medlaw.com looks at why EMTALA might just be safe from the courts. The most recent of my links is a 2014 study by E.H. Morreim: “Dumping the 'Anti-Dumping' Law: Why EMTALA Is (Largely) Unconstitutional and Why It Matters”; at the webpage, click on the link for the 76-page PDF. (Ms. Morreim seems to think private property still exists in America.)

The proponents of universal healthcare muddled their issue by placing it within the rubric of “rights.” There are “philosophical” questions they haven’t answered satisfactorily: Should non-payers get the same mix and quality of medical products and services as those who do pay? Should those whose healthcare is paid for by the government get the same care as those who pay for their healthcare themselves?

For the proponents of universal healthcare, the answers are yes. And not only that, these egalitarians think that those who don’t pay should have nothing demanded of them; no garnishments of wages, no liens, no requirements that one get healthy so that healthcare costs can be cut. They also encourage those getting “free” stuff from the government to think that they are entitled to it, and that those who pay for that “free” stuff are not entitled to it. You see, it’s a right.

Jon N. Hall is a programmer/analyst from Kansas City.

Proponents of “universal healthcare” often assert that healthcare is a right. If so, then healthcare is a rather different kind of right than those of Life, Liberty, and the pursuit of Happiness. We get those unalienable rights from our Creator, or from Nature. But healthcare is a complex array of products and services that must be provided by other people, and they expect to be paid.

Everyone, however, already has a right to healthcare, just like they have a right to food, shelter, and other necessities. Indeed, if a purveyor of necessities refused to sell his goods to certain Americans, perhaps through redlining, he’d have a nice little federal case on his hands. Even so, one still must pay for those necessities.

What the proponents of universal healthcare (also called single-payer or Medicare for all or socialized medicine) really mean by healthcare being a right is that the government should provide healthcare to everyone for “free.” Which means someone else must pay.

Of course, ObamaCare is not universal healthcare; it’s a hybrid of Medicaid for some, government subsidies for others, and a mandate for those who have the money to pay the entire cost of health insurance to do so. And the millions who are left out of ObamaCare can get “free” healthcare at hospital emergency rooms.

Everyone in America, including illegal aliens, can receive “free” healthcare from hospitals that take Medicare patients, which means just about all hospitals. This started in 1986 with EMTALA, the Emergency Medical Treatment and Active Labor Act. With EMTALA, America has had universal healthcare for 29 years.

The problem with EMTALA is that there were no payment provisions; the feds didn’t provide any funding. What that necessitates is that hospitals must charge paying patients more in order to cover the costs of care for the non-paying patients. It’s called “cost-shifting.”

To see the dynamic here, let’s transfer it to restaurants. If the feds required all restaurants to provide free food to those who can’t pay and, like EMTALA, the feds didn’t pay for those non-payers, then eateries would have to charge more than they otherwise would to paying customers. That, or go out of business. In a nifty little article at Forbes in 2012, Dr. Amesh Adalja, M.D. wrote:

One other consequence of EMTALA, also not often mentioned, is that it creates a moral hazard. If a person knows that, because of EMTALA, they will not be refused emergency care despite being unable to afford it, what is their incentive for obtaining insurance? While a person is still legally liable for the hospital charges, many hospitals eventually “forgive” the unpaid debt with minimal repercussions for the individual.

What EMTALA has predictably created is a situation in which emergency care has become viewed as a right to be provided by healthcare facilities irrespective of the fact that to do so nullifies the rights of providers. In creating this false right, EMTALA also fuels the animus of certain individuals against purchasing their own health insurance because the law created an emergency care safety net that is always available.

Perhaps EMTALA is why proponents of universal healthcare think it is a right. But if healthcare is indeed a right, then it is a right that conflicts with the rights of others. In 2011, attorney Jonathan Turley wrote:

EMTALA forces those, who can afford to pay for health insurance, to cover the cost for those who cannot. If the government can mandate that you pay for someone else’s care, why can’t it mandate that they pay for their own care? If ACA [ObamaCare] is unconstitutional, then so is EMTALA.

That last sentence is bracing, because in NFIB v. Sebelius, Chief Justice Roberts wrote that the government cannot command individuals to buy health insurance. However, Roberts’s conclusion with regards to the individual mandate is regarded by some as mere obiter dicta.

Mr. Turley may have mischaracterized EMTALA by claiming that it “forces those, who can afford to pay for health insurance, to cover the cost for those who cannot.” The “force” involved is in requiring hospitals to treat everyone; how the hospitals pay for that uncompensated care is their problem. EMTALA doesn’t “mandate that you pay for someone else’s care.” That’s just what the hospitals do to stay afloat. Hospitals could accept lower profit margins, get leaner and meaner, lay off workers, or take other cost-cutting measures.

One issue in EMTALA is akin to one that was found unconstitutional in NFIB: ObamaCare attempted to condition continued receipt of Medicaid payments to the States on their acceptance of the expansion of Medicaid to yet more non-paying patients, and EMTALA conditions continued receipt of Medicare payments by hospitals on their acceptance of non-paying patients.

It would seem that the case against EMTALA is even stronger than the one against the Medicaid expansion in ObamaCare, because Medicare patients have paid for their care. With EMTALA, Congress was not only threatening hospitals with loss of Medicare payments, they were also threatening Medicare patients with less choice had hospitals opted out of Medicare. And opting out of Medicare is what hospitals should have threatened to do back in 1986. Had hospitals banned together in a mass opt-out, EMTALA might never have come to pass.

Cost-shifting in government healthcare didn’t begin with EMTALA; Medicaid imposes considerable cost-shifting because it pays less than the going rate. Which means private sector payers must pay more. ObamaCare actually doubles down on cost-shifting, as it raids Medicare for $716B over ten years to pay for Medicaid expansion, even though Medicare is already cash-flow negative.

Medicaid is different than Medicare. Medicare has its own dedicated tax, the payroll tax, as well as its own “trust fund.” But Medicaid doesn’t have its own revenue source and is funded by general revenue from income taxes and such. When the Medicare “trust fund” is depleted, adjustments by law must be made, either upping the payroll tax or cutting benefits. But with Medicaid no such moment of truth will ever be triggered; it’s an entitlement. Whereas Medicare is seen as insurance, Medicaid is a means-tested social welfare program. So when ObamaCare raids Medicare to pay for Medicaid, it’s taking from insurance to give to welfare. But Democrats now say that those on Medicaid are “insured.”

Hoover Institute Fellow attorney Richard A. Epstein expands on EMTALA in his book Mortal Peril: Our Inalienable Right to Health Care? You can read his take on EMTALA at Google Books, beginning on page 91. Lucy Hornstein, a family physician, provides insights with a bit of humor in “Challenge the constitutionality of EMTALA.” In “Is EMTALA Constitutional?” the publisher at Medlaw.com looks at why EMTALA might just be safe from the courts. The most recent of my links is a 2014 study by E.H. Morreim: “Dumping the 'Anti-Dumping' Law: Why EMTALA Is (Largely) Unconstitutional and Why It Matters”; at the webpage, click on the link for the 76-page PDF. (Ms. Morreim seems to think private property still exists in America.)

The proponents of universal healthcare muddled their issue by placing it within the rubric of “rights.” There are “philosophical” questions they haven’t answered satisfactorily: Should non-payers get the same mix and quality of medical products and services as those who do pay? Should those whose healthcare is paid for by the government get the same care as those who pay for their healthcare themselves?

For the proponents of universal healthcare, the answers are yes. And not only that, these egalitarians think that those who don’t pay should have nothing demanded of them; no garnishments of wages, no liens, no requirements that one get healthy so that healthcare costs can be cut. They also encourage those getting “free” stuff from the government to think that they are entitled to it, and that those who pay for that “free” stuff are not entitled to it. You see, it’s a right.

Jon N. Hall is a programmer/analyst from Kansas City.