That day of reckoning yet awaits.
Obliging more health persons into the insurance "risk" pools is fundamentally an exercise in spreading the same risk and health care costs over a larger population. While individuals may see their health insurance premium decline thanks to more persons paying into the system, the total consumption of health care services has no reason to slow down. A mandate by itself will not reduce costs.*
Speaking of saving money, the omnivorous DMCB, spent some of its teenage years living on a country farm. The family did its own butchering and, never leaving anything to waste, did everything it could to use every scrap of meat. As far as the DMCB is concerned, "pink slime" a.k.a. "boneless meat trimmings" is a virtuous confluence of that same thrift on an industrial scale combined with centrifuges and ammonia. Talk about a slaughter.
Last but not least, the DMCB got one more population health management insight from Charles Duhigg's book The Power of Habit. In it, Mr. Duhigg describes how Target's brainiacs discovered an association between the emergence of new buying habits in young women and early pregnancy. While that classic exercise in predictive modeling is not new, what happened next was insightful: creeped out Target customers pushed back when they unexpectedly started getting maternity and baby product coupons. In response, Target learned to camouflage its recruitment efforts by disseminating its coupons with random and unrelated product offers. The DMCB wonders if the same surreptitious approach could somehow be adapted to recruit high risk patients into population health management. $5 toward text messaging if we can ask you some questions about your wellness.... and diabetes.
*Assume for a moment that 90 persons have health insurance which costs $500 a year. That "pools" 90 x $500 or $45,000 in resources that are available pay for persons that need to be in a hospital.
Then assume 4 persons get sick - one gets appendicitis, one is involved in a car accident, one gets gets an infected paper cut and the last one neglects to follow a DMCB spouse preventive health recommendation and gets what he deserves. If the average cost per hospitalization is $10,000, the total cost is $40,000. That leaves $5000 left over.
Cost of the insurance for each of the 90 persons: $500.
Cost of the illness for each of the 90 persons : $444.
Total amount of money going to the insurance company: $45,000.
Total cost of the illness: $40,000.
Amount that goes to the insurance company's bottom line: $5000
One year later, the 90 persons realize that there are ten persons living in their community who are not buying insurance. Assume these freeloaders are healthy. The 90 persons have a majority and pass an ACA with a mandate. Over the next year, four other persons get sick again.
Cost of the insurance for each of the 100 persons: $500.
Cost of the illness for each of the 100 persons : $400.
Total amount of money going to the insurance company: $50,000.
Total cost of the illness: $40,000
Amount that goes to the insurance company's bottom line: $10,000
Of course, it's more complicated than that. Of the ten forced to buy insurance, some have preexisting conditions and the cost of a hospitalization rises year after year, but that doesn't change the basic math underlying a mandate: total health care costs are the same, but they're spread over a larger base population.