The American health care system is built on a significant conceptual tension that grows more intense with each passing year; it devolves primary authority over medical decisions to individualized physician-patient transactions, while increasingly embodying notions of group solidarity and systemic interconnectedness in its overall design. The passage earlier this year of the landmark Patient Protection and Affordable Care Act (“PPACA”) only sharpens this tension. Many of the PPACA’s most important measures reflect the principle of group solidarity. For instance, insurers will be restricted in their ability to thinly slice risk pools by practicing age and gender rating and by enforcing preexisting-condition exclusions. The individual mandate to purchase insurance will drive more healthy Americans into larger private risk pools, and the prices they pay will in many cases be higher than is appropriate for their own age- and health-adjusted actuarial risk; this mandate will effectively result in a redistributive tax on youth and good health. On the public-finance side, the PPACA’s substantial expansions of Medicaid coverage will be funded primarily by higher taxes on affluent federal taxpayers, reflecting an unprecedented commitment to guarantee coverage for virtually every American below or near the poverty line. For all of these reasons and more, individualized patient and physician choices about utilization will, when aggregated, reverberate through an increasingly integrated system struggling with profound cost and quality concerns.
