As Congress continues to struggle with health-insurance reform, members should be ruminating on the scenes of “recovery” beaming in from Texas and Florida, where the majority of households — many now severely damaged or destroyed — had not purchased flood insurance. As after Hurricanes Katrina in 2005 and Sandy in 2012, many of those now waiting to see if federal aid and charity will help rebuild homes, of course, wish they had.
Flood insurance in storm-prone areas and health insurance have a lot in common, especially when it comes to the mental calculus that goes into the purchase. You are paying money to insure against a personal calamity you hope won’t happen, even though you know that it’s a real possibility.
Texas and Florida will experience hurricanes and floods. Just as surely, you are likely at some point to face an expensive medical condition. Weather disasters will probably grow more common thanks to climate change. And more people will face bank-account-draining illnesses thanks to longer lifespans, better treatments and high medical prices.
Yet there’s been a 9 percent drop in flood-insurance coverage in the Houston area over the past five years and a drop of 15 percent in Florida, Associated Press investigations recently found. In some of the most severely affected counties, the drop was more than 20 percent.
Why would Floridians (who regularly face hurricanes) or Texans (who’ve experienced five major floods since 2010) make this unwise choice? The current head of the federal flood insurance program, Roy Wright, thinks he knows the answer: a decision by Congress in 2012 to raise premiums for the troubled National Flood Insurance Program that covers what private insurers won’t. Flood insurance now doesn’t fit into stretched family budgets.
Though federal flood insurance is required to get a federally backed mortgage in high-risk zones, maps of those zones have been redrawn in some areas to ease the financial burden of homeowners. Also, it turns out that some people who buy insurance to get a loan later let it lapse, since there is limited enforcement. In Florida’s hazard zones, only 41 percent of households have flood insurance.
The fact the majority of Floridians and Houstonians didn’t buy flood insurance underlines why, as a matter of practicality, not politics, every person needs to have health insurance. And whether government-provided or purchased in the market, it has to be comprehensive and affordable. That’s not the case now.
Many Republicans want to do away with the Obamacare requirement that everyone purchase some kind of health insurance, the politically unpopular “individual mandate.” They want to allow people to buy bare-bones plans that, for example, don’t cover items such as cancer or medicines. They say Americans who want cheap, minimal coverage or no health insurance at all should be allowed to choose that option — to play the odds and use their money elsewhere.
“You know what, Americans have choices — and they’ve got to make a choice,” Rep. Jason Chaffetz, R-Utah, told CNN. “And so maybe, rather than getting that new iPhone that they just love and they want to spend hundreds of dollars on, maybe they should invest in their own health care.”
Well, for most middle-income families, that’s not the kind of choice people are making. In explaining why she decided to forgo flood insurance in Houston, Kris Ford-Amofa told a New York Times reporter that she had always tried to stick to a budget, down to choosing the pancake syrup that gives her the best value.
Likewise, when Americans choose not to have health insurance, it’s because they’re (unwisely) playing the odds and triaging the finite dollars in the family budget. If you’re a family struggling to pay for daily necessities like rent, food and college, you may decide to do without.
This week, the U.S. Census Bureau reported that median household income in 2016 rose to $59,039, a 3.2 per cent increase since 2015. But for many families, health-insurance premiums and medical expenses have risen more.
Insurance plans for a family of four in some parts of Florida went from $550 to $1,600 a month in the last several years and some are poised to go 10 to 20 percent higher in 2018, Margot Kast, an insurance agent, told me. She calculated similar price rises in some other states. Those prices have been overwhelming for many who earn too much to qualify for government subsidies. “Most people want insurance; they just can’t afford it,” she said.
In hurricanes, as in health, when the unwelcome cataclysm happens the costs are even more unaffordable. Meanwhile, the pain and suffering are so enormous that government cannot turn its back.
Now we will all pay to rebuild those homes in Texas and Florida — a cost that is likely to run into the tens or hundreds of billions.
As a society, emotionally we have to pitch in to rebuild wrecked homes. Likewise, when a pregnant woman turns up at a hospital in labor or a 60-year-old man develops crushing chest pain, we can’t turn away.
Flood insurance — whether federally provided or privately offered — needs to be required if you live in a flood plain. Likewise — Congress, pay attention here — comprehensive health insurance needs to be mandated or provided for every American.