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Life Health > Health Insurance > Life Insurance Strategies

Can We Please Stop Hyping Death and Taxes?

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“Yes, the Senate GOP tax plan would cause ‘thousands’ to die.”

So read the headline of a short essay by Lawrence Summers published in the Washington Post on Sunday night. Summers, an eminent economist and former Treasury secretary, argues that the thousands of deaths will be a consequence of the Senate tax bill’s provision eliminating the Affordable Care Act’s requirement that individuals purchase health insurance or face a penalty.

This argument is overblown. It implies that the goal of public policy should be to reduce the number of preventable deaths to something as close to zero as possible. But of course this isn’t the case. More than 30,000 people die every year in car accidents. Each of these deaths is a tragedy, and in the truest sense, every life has inestimable value. But our fallen world has finite resources, and as a society we have decided that some deaths are an acceptable trade-off for the benefits of allowing vehicles to travel faster than 20 miles per hour. A similar argument could be made for policies surrounding homicides, foreign conflicts and a host of other issues.

(Related: Tax Overhaul Off to Rocky Start as Senators Bicker Over Budget

Even in health policy, the goal has never been to eliminate preventable deaths. To take the extreme case, no one is arguing for a paramedic in every building and home. We have implicitly decided that some number of preventable deaths is acceptable in order to achieve other social goals.

Economists typically think of policies like the individual mandate as affecting the probability of death, rather than causing death directly. Repealing the individual mandate as part of tax reform is unwise. But will it increase the probability of death, and hence mortality rates? It’s hard to say.

On the one hand, the elimination of the mandate will increase the number of individuals without insurance, which could increase mortality rates. But the link between mortality rates and insurance coverage among the population that buys insurance because of the mandate is largely unknown. (For one thing, this population is intended to be young and healthy, not old and sick, which suggests that the link between insurance and mortality among this specific group is weaker than you might think.)

More fundamentally, the effectiveness of the individual mandate in compelling individuals to purchase insurance is highly uncertain.

The nonpartisan Congressional Budget Office estimates that repealing the individual mandate will increase the number of uninsured people by 13 million in 2027. This sounds like a precise estimate, and I’ve strongly defended the integrity and quality of CBO analysis.

Man looking at a storm (Photo: Thinkstock)

(Photo: Thinkstock)

But economists don’t know with any precision what would happen to the ranks of uninsured people if the mandate were repealed. Because a mandate to buy health insurance is such an unusual feature of public policy — and because so much else in health policy changed when the mandate took effect in 2014 — it is hard to empirically estimate its effects.

This uncertainty has been illustrated by the CBO itself. Last month, it concluded that it had been overestimating the mandate’s effectiveness, and therefore reduced its estimate by nearly 20%. My guess is that the CBO is still overestimating the mandate’s effectiveness, and that many fewer than 13 million people will move into the ranks of the uninsured if the mandate is eliminated. The available evidence on the individual mandate seems to point in that direction, and the CBO’s initial analysis that obtaining health insurance would become a social norm as a consequence of the mandate strikes me as off the mark.

Rather than engaging in rhetorical excess about the GOP tax overhaul causing thousands to die, it would be better to discuss how to move health policy forward when Republicans succeed — as they almost certainly will — in repealing the individual mandate while leaving the rest of the ACA largely intact.

Republicans should not simply eliminate the mandate and call it a day. Doing so could increase premiums, ultimately adding to the burden faced by taxpayers. And in some parts of the country it could disrupt the individual market for health insurance. It would also be a missed opportunity to improve health policy.

They should enact real health care reform, with universal coverage against catastrophic medical events as their ultimate goal. As part of this effort, subsidies should be offered to those who can’t afford coverage, people with pre-existing conditions should be protected, and individuals should be encouraged to purchase coverage through means less heavy-handed, and potentially more effective, than the ACA’s mandate. In addition, Republicans should inject market discipline into the system as a way to control costs and encourage innovation and productivity. Democrats will have a different approach, with many arguing for a single-payer, Medicare-for-all system. Let’s have that debate.

A problem with exaggerated rhetoric is that it inhibits productive debate. Back in 2009, some conservatives, notably Sarah Palin, argued that Obamacare would create “death panels.” This rhetoric was irresponsible, and it short-circuited an important national conversation about end-of-life counseling.

It’s disheartening to hear that type of rhetorical excess return — especially from those who know better.

— For more columns from Bloomberg View, visit


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