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Can Compulsory Health Insurance Be Justified? an Examination of Taiwan’S National Health Insurance * Chuan-Feng Wu I

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Can Compulsory Health Insurance Be Justified? an Examination of Taiwan’S National Health Insurance * Chuan-Feng Wu I CAN COMPULSORY HEALTH INSURANCE BE JUSTIFIED? AN EXAMINATION OF TAIWAN’S NATIONAL HEALTH INSURANCE * CHUAN-FENG WU I. INTRODUCTION ...................................................................... 52 II. TAIWAN’S NATIONAL HEALTH INSURANCE (NHI) ................ 59 A. Background .................................................................... 59 B. Debates on the Constitutionality of the Compulsory NHI ............................................................ 62 III. THE SIGNIFICANCE OF THE FREEDOM TO PURCHASE OR DECLINE HEALTH INSURANCE .......................................... 65 IV. HUMAN RIGHTS IMPACT ASSESSMENT FOR THE COMPULSORY NHI ......................................................... 69 V. STEP 1: EXAMINE HUMAN RIGHTS BURDENS OF THE COMPULSORY NHI ................................................................ 71 A. Taiwanese Constitution ................................................. 73 B. Individual Autonomy ...................................................... 74 C. Moral Powers ................................................................ 76 D. Historical Development ................................................. 77 VI. STEP 2: CLARIFY THE POLICY PURPOSES OF THE COMPULSORY NHI ......................................................... 79 VII. STEP 3: EVALUATE THE EFFECTIVENESS OF THE COMPULSORY NHI ......................................................... 83 VIII. STEP 4: ASSESS TRADE-OFF RELATIONSHIPS IN COMPULSORY NHI (IMPORTANCE TEST) ............................... 87 A. The Importance Test ...................................................... 88 B. The Importance Test Revisited ...................................... 90 C. The Importance for the Individual Mandate without Insurance Package Option (Taiwan’s Case) ............................................................. 93 1. The Compulsory NHI’s Impacts on Moral Powers ......................................................... 94 2. Trade-off under the Compulsory NHI .................... 98 * Assistant Research Professor, Institutum Iurisprudentiae, Academia Sinica, Taipei, Taiwan. J.S.D., U.C. Berkeley School of Law, Berkeley, U.S.A. The author can be reached at [email protected]. See Academia Sinica, Research Professors, INSTITUTUM JURISPRUDENTIAE, http://www.iias.sinica.edu.tw/cht/index.php?code=list&ids=78&eng=1 (last visited Sept. 26, 2012). 51 52 JOURNAL OF LAW AND HEALTH [Vol. 26:51 D. Importance Test for Individual Mandate with Insurance Package Options ................................... 99 IX. CONCLUSION ............................................................................. 101 I. INTRODUCTION In March 2010, U.S. Congress’s enactment of a comprehensive health care reform bill, the Patient Protection and Affordable Care Act,1 along with the Health Care & Education Affordability Reconciliation Bill of 20102 (collectively referred to herein as the “Health Care Reform Act”), adopted the “individual mandate,” a requirement that every American possess a certain level of health insurance3 through which universal access to health care can be achieved.4 The individual mandate no doubt is the most important yet most controversial linchpin of the U.S. Health Care Reform Act. The mandate drew scrutiny regarding its constitutionality because a direct and unconditional requirement for an individual to transfer money to one or more health insurance programs5 for health or economic purposes seems to violate 1 Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (2010). The Act was passed by the House of Representative on March 21, 2010 and signed into law by President Barack Obama on March 23, 2010. Patient Protection and Affordable Care Act (PPACA), ENCYCLOPEDIA BRITANTICA, available at http://www.britannica.com/EB checked/topic/1673534/Patient-Protection-and-Affordable-Care-Act-PPACA/295483/Final- passage (last visited Feb. 1, 2013). 2 Health Care & Education Affordability Reconciliation Act of 2010, Pub. L. No. 111- 152 (codified as amended in scattered sections of U.S.C. § 20 and U.S.C. § 42). 3 The individual mandate is essential to the effectiveness of the U.S. Health Care Reform because lack of health insurance in the American health care system was the main problem to be rectified in the pre-March 2010 insurance system. Karen Tumulty, Kate Pickert & Alice Park, America, The Doctor Will See You Now, TIME, Apr. 5, 2010, at 18, 20. According to information provided, 32 million Americans were uninsured in March 2010. Jill Jackson and John Nolen, Health Care Reform Bill Summary: A Look at What's in the Bill, CBS (last updated Mar. 23, 2012, 5:00 PM), http://www.cbsnews.com/8301-503544_162-20000846- 503544.html. In 2008, the U.S. Centers for Disease Control and Prevention (CDC) also estimated that there were about 43.8 million Americans (14.7% of total population) uninsured, of which 15.25% were under age 18 (6.6 million) and over 65 years old (0.2 million). HEALTH INSURANCE, CENTERS FOR DISEASE CONTROL AND PREVENTION, http://www.cdc.gov/nchs /fastats/hinsure.htm (last updated Aug. 20, 2012). 4 See Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (2010) Section 5000A(a) states: “Requirement to Maintain Minimum Essential Coverage. An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.” 5 There are two main types of universal health care systems. One is the single-payer coverage system, such as the English National Health Service, the Canadian Health Care System, and Taiwan’s National Health Insurance, in which health care would be financed through taxation, thereby eliminating private insurance companies (because private health insurance is prohibited except to finance items not covered by the governmental plans). Adam Oliver, The Single-Payer Option: A Reconsideration, 34 J. HEALTH POL. POL'Y & L. 509, 527 (2009). The second system is the multiple-payer system, such as French National Health Insurance and the German health insurance system, which contains competitive health 2013] CAN COMPULSORY HEALTH INSURANCE BE JUSTIFIED? 53 individual liberties (or individual autonomy),6 especially the “disenrollment freedom” (the freedom to refuse to enroll in a health care program).7 Still today, there is much disagreement about whether the individual mandate could be considered justified as “regulating” individual liberties. Therefore, a systematic examination of Taiwan’s health care reform, which is a single-payer system based upon regulated competition but has a compulsory scheme that contains a mandate, might interest U.S. policymakers and scholars who either support or oppose universal coverage. First, similar to the new U.S. Health Care Reform Act,8 Taiwan’s National Health Insurance (NHI) also requires all citizens to insurers under clear and strong federal guidelines. PETER ZWEIFEL, DISCUSSION PAPER: MULTIPLE PAYERS IN HEALTH CARE: A FRAMEWORK FOR ASSESSMENT, HEALTH NUTRITION AND POPULATION FAMILY, HUMAN RESOURCES DEVELOPMENT NETWORK, WORLD BANK 1 (2004), available at http://siteresources.worldbank.org/HEALTHNUTRITIONAND POPULATION/Resources/2816271095698140167/ZweifelMultiPayersinHealthCareFinal.pdf . Generally speaking, the single-payer system generates far less administrative costs than the multiple-payer system, but the former also takes away the patient's choice of provider. See infra Section VI. On the contrary, the multiple-payer system may have an advantage in designing payment systems in a way that reinforces incentives for providers to do the right thing for their patients, resulting in more value for money spent. Aftab Hussain & Patrick A. Rivers, Policy Challenges in US Health Care System Reform, 36(3) J. HEALTH CARE FIN. 34, 41 (2010). 6 Mark A. Hall, The Constitutionality of Mandates to Purchase Health Insurance, 37 J.L. MED. & ETHICS 40, 40 (2009). 7 “Disenrollment freedom” means recipients can freely decide to disenroll in a health care plan while their health care needs are few, and to enroll when their health care needs escalate. Disenrollment, THE FREE DICTIONARY, http://medicaldictionary.thefreedictionary.com/ Disenrollment (last visited Oct. 4, 2012). 8 According to sections 1501(b), 1513, and 1511 of the Patient Protection and Affordable Care Act, the Internal Revenue Code of 1986 is amended by adding sections 5000A (maintenance of minimum essential coverage) and 4980H (shared responsibility for employers regarding health coverage), and the Fair Labor Standards Act of 1938 is amended by adding section 18A (automatic enrollment for employers of large employers). Amended section 5000A of the Internal Revenue Code first states that, in 2014, individuals will be required to purchase health insurance or face a $95 annual fine (via income taxes), which will increase to $350 in 2015 and $750 in 2016. 26 U.S.C. § 5000A(b)(1). There are only a few exceptions. § 5000A(d)(2) (for religious objectors); § 5000A(e)(1) (for those who cannot afford health insurance); § 5000A(e)(2) (taxpayers with incomes less than 100% of the Federal Poverty Line (FPL)); § 5000A(e)(3) (American Indian tribe members); § 5000A(k) (those with a hardship waiver); § 5000A(d)(3) (individuals not lawfully present); § 5000A(d)(4) (incarcerated individuals); § 5000A(e)(4) (those not covered for less than three months). For those under age 18, most of which are dependents of other taxpayers, the amount of the penalty for not
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