Can compulsory health insurance be justified? An examination of Taiwan's National Health Insurance.

• Author: Wu, Chuan-Feng
• Position: V. Step 1: Examine Human Rights Burdens of the Compulsory NHI C. Moral Powers through IV. Conclusion, with footnotes, p. 76-102

3. Moral Powers

   Third, the freedom to purchase or decline health insurance should be regarded as fundamental because it protects individuals' ability to make autonomous health care decisions, which are value-laden, dependent on one's perceived final ends, and related to the individual's own conceptions of the good. (154) This point is further supported by Rawls's model of justice, in which a list of basic rights and liberties can be drawn up analytically: "we consider what liberties provide the political and social conditions essential for the adequate development and full exercise of the two moral powers (capacities for the conception of the good and the sense of justice) of free and equal persons." (155) Thus, the freedom to purchase or decline insurance is fundamental because it enables individuals to exercise moral powers in forming, revising and rationally pursuing their own conceptions of the good regarding health care. Without this freedom, individuals can hardly make choices--which reflect the profound and sometimes irreconcilable differences in their moral and philosophical values (156)--among reasonable alternatives (e.g., different medical interventions) proposed by different health care programs.

   More specifically, medical interventions reflect the integrated physical and mental functions that the individual expects to reap by receiving such interventions, and these functions (e.g., restoring the body's functional parts from a disease) reflect the individual's own conception of the good (e.g., having functional body parts). (157) Therefore, the freedom to make health care decisions permits an individual not only to freely choose between different medical interventions, but also to choose between different conceptions of the good. (158) In short, when an individual chooses between different health care programs, at the same time he or she is also making choices between different medical interventions, which reflect the individual's own conceptions of the good. (159) Therefore, the freedom to purchase or decline health insurance--which assures that an individual can freely form carefully considered goals and desires, as well as the ability to fulfill such goals and desires (160)--then becomes a necessary means for the individual to fully and freely exercise the moral power to pursue the conceptions of the good. (161)

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   Fourth, the development of health care policies worldwide also shows continuing emphasis on individual liberty to purchase or decline health care insurance. For example, even though European countries generally believe there are good reasons for compulsory health insurance, they have faced challenges to this view based on individual liberty. (162) In Germany, trade unions believed that compulsory health insurance (proposed in the Health Insurance Act in 1883) would be a paternalistic reform creating a system of state supervision of the peoples' health. (163) As a result of this concern, even today those with an income above a certain threshold (48,150 [euro] per year in 2008) (164) are still allowed to choose whether to opt out of the statutory health insurance. (165) Thus, the extent of compulsoriness within the social health insurance might be limited due to the protection of individuals' liberty. (166) In the Netherlands in 2006, health care reform, which made health insurance compulsory for the entire population, (167) was also criticized for limiting the freedom of choice both within the health care market and within insurance markets. (168) This struggle shows the endeavor to balance individual liberty and social welfare. on the one hand, social health insurance departed from liberalism by expanding the role of the state and demanding compulsory contributions. (169) on the other hand, it also departed from paternalism by obligating the state to prove that restricted individual liberties are not out of proportion to the benefits received under the mandatory duties imposed by such a scheme.

   In the U.S., several states (such as Virginia, Arizona, and Missouri) have proposed variations of a Health Care Freedom Act, in which the right not to be forced or coerced into joining a government-approved health care program is regarded as a basic right of medical autonomy. (170) state legislation in the u.s. shows a high interest in protecting individual choice in coverage and service under health care insurance plans. This interest is a continuing balancing act between providing services for the truly needy with the American desire for a lightly governed health care delivery system. (171)

   6. STEP 2: CLARIFY THE POLICY PURPOSES OF THE COMPULSORY NHI

      It is important to identify health care policy purposes because health care policy requires different means to achieve various purposes and some means impact human rights. There are two reasons for this. First, clearly articulated goals for health care policies can help "to identify the true purposes of the intervention, to facilitate public understanding and debate about legitimate purposes, and to reveal prejudice (or pre-justice), stereotypical attitudes, or irrational fear." (172) Without a clear policy purpose, it is difficult to explicitly identify what policy instruments influence human rights, and to evaluate whether the means to execute certain policies are adequate to achieve their purpose. (173) second, in addition to addressing a clear purpose, in this step the state also needs to prove that the means used by a coercive health care policy are reasonably likely to achieve the proposed purpose, and that there is an adequate and direct connection between the state's actions and the policy's purposes. (174) In other words, the existence of a valid compelling purpose alone cannot justify a health care policy because the real issue here is not "what the state does" but "whether the health care policy adequately leads to an effective outcome."

      In assessing the human rights impacts of Taiwan's compulsory NHI, policy purposes should be clearly evaluated because they can help identify the true purposes and inform the debate about legitimate health care purposes. (175) According to Taiwan's Department of Health (176) and Council of Grand Justices, (177) Taiwan's NHI adopts an individual mandate as an instrument to achieve multiple goals: (178) (1) increasing the participation rate and enrollees to increase the financial resources of the NHI; and (2) preventing negative effects caused by adverse selection (also termed "reverse selection" or "enrollee bias"). (179) The needs for invasive interventions imposed by the NHI on individual autonomy are then assessed differently for different public health purposes in this section. (180)

      The NHI's individual mandate is reasonably likely to achieve the first policy purpose--increasing the participation rate--because requiring all citizens to subscribe the NHI creates a single, national pool and broadens the revenue base, thereby providing comprehensive coverage for all Taiwanese people. (181) Different countries' experiences (such as Taiwan, Japan, Germany, The Netherlands, U.K., and Canada) (182) also show that the compulsory health care system did improve actual population coverage, (183) establish a self-financing mechanism, (184) and significantly lowered financial barriers that prevent the poor from receiving health care. (185)

      The second policy purpose of the NHI's individual mandate is to prevent adverse selection, which is "a phenomenon that occurs within a mix of covered lives for a plan, when patients with high health care utilization habits select a particular plan, in greater numbers than are otherwise representative of the population as a whole." (186) The individual mandate achieves this end by prohibiting the exclusion of people from coverage because of preexisting conditions or anticipated health risks. (187) Because social health insurance systems are required to cover individuals and their pre-existing health conditions, nothing prevents a healthy individual from forgoing purchasing insurance until he or she is sick. (188) But studies showed that people would not likely enroll in health insurance unless they expected illness or an accident in the near future or they were already sick or disabled. (189) Therefore, without a mandate to purchase health insurance, healthy individuals would leave the health insurance to only the costliest individuals (who are mainly the sick and the old). (190) Adverse selection would then lead to severe financial hardships for the social health insurance scheme (191) because it would be covering only those sick or high-risk individuals. (192)

      In addition, adverse selection also undermines the whole point of social health insurance, which is to protect people by sharing risks as widely as possible. (193) Private health insurers tend to target healthy individuals and to exclude those who face abnormally high risks due to their poor health behaviors (e.g., lung cancer caused by smoking). (194) Therefore, without a compulsory mechanism, high risk and sick individuals and groups would be "unproportionately" distributed between social health insurance and private health insurance. Thus, disadvantaged minority groups (e.g., the poor and the sick) would comprise the majority of social health insurance subscribers, (195) and social health insurance would end up with large expenses and be unfairly placed at a competitive disadvantage. The disadvantaged then might be denied coverage or given reduced coverage with higher premiums because of the expected costs of health care services. (196) Furthermore, in a vicious spiral, more and more healthy people would withdraw from social health insurance due to the excess financial burden, and this would further worsen the financial viability of social health insurance. (197)

      The formula for determining social health insurance premiums (see infra, Table 1 (198)) can help clarify whether a compulsory...