People talk about “free-riding,” or uncompensated care, as if it were a law of physics, like gravity: a fundamental problem that has no other solution than forcing everyone to buy health insurance. But it’s not. In fact, “free-riding” is a direct result of a clumsy, unfunded mandate passed by Congress in 1986, called the Emergency Medical Treatment and Active Labor Act, or
EMTALA.
EMTALA requires that hospitals provide emergency care to anyone who needs it, regardless of citizenship, legal status (i.e. illegal immigrants), or ability to pay. Technically speaking, EMTALA only requires this of hospitals that accept Medicare and Medicaid insurance. But since Medicare and Medicaid represent more than half of all health expenditures in the United States, very few hospitals are equipped to function without government funding, and therefore, nearly every hospital in the United States is covered by EMTALA.
EMTALA is, indeed, the central factor in the “free-rider” phenomenon. The government forces hospitals to care for these individuals, without financially compensating hospitals for the cost of doing so. It is one of the largest and most coercive unfunded mandates in the United States.
Personally, I think it’s a good thing that we as a country ensure that everyone, regardless of ability to pay, has access to emergency health care. (We might even call it universal health care.) As I wrote
last year,
[INDENT]There are some instances in which we should obviously consider more than economics: Certainly no wealthy nation should allow a destitute woman who has been hit by a car to die in the street. Likewise, in a pressing emergency, catastrophic care should be provided to those who need it, and the costs can be sorted out later…A more organized program to cover these expenses — provided that the distinction between emergency, chronic, and routine care were reasonably well defined — would be a step forward, and would also clarify the boundaries of the free market in health insurance.
[/INDENT]Even leaving comprehensive health reform aside, there are many, many alternatives to caring for these individuals that don’t involve an individual mandate. The government could cut other spending or raise taxes in order to fully reimburse hospitals for EMTALA care. The government could require hospitals to check for Medicaid, Medicare, and S-CHIP eligibility, and then fully fund care for the remainder of the uninsured. You could
repeal EMTALA and replace it with a PPACA-like expanded Medicaid program. None of these adjustments are optimal, but none of them impose a Constitutionally problematic individual mandate.
(In an ideal world, we would replace both EMTALA and government-controlled Medicaid with cash payments or premium support for the indigent to purchase their own catastrophic coverage in the private market.)
