By Luke Brinker
In an ideal world, there would be no need for an individual mandate to purchase private health insurance. That’s because in an ideal world, the United States would discard its inefficient, costly system of for-profit health care. As former Labor Secretary Robert Reich, an economist at the University of California-Berkeley, has argued, Medicare for all (yes, genuinely socialized health care) would insure the entire US population and do a far better job of reining in costs than private insurance.
Of course, we don’t live in an ideal world. It would be convenient to blame Tea Party demagogues crying “death panels!” for our inability to fundamentally transform the American health care system. But during the health care debate of 2009-10, conservative Blue Dog Democrats in the House of Representatives and right-leaning members of the Senate Democratic caucus like Max Baucus and Joe Lieberman did far more to scuttle structural health care reform than Tea Party Republicans. It was at the conservative Democrats’ insistence that lawmakers dropped provisions for a public option and a Medicare buy-in.
The Patient Protection and Affordable Care Act, the law signed by President Barack Obama in the spring of 2010, was far from perfect. It works within the existing for-profit health insurance model. But given the resistance of members of the president’s own party to even giving consumers the choice of a government-administered health plan, it’s unclear how the law could have been made better and still passed Congress. The law, which requires individuals to purchase health insurance or pay a fine, resembles a plan offered by the conservative Heritage Foundation in the early 1990s. That stubborn fact hasn’t stopped Michele Bachmann and Co. from labeling the law a radical “government takeover” of health care. Health reform opponents can’t very well attack most of the individual provisions of the law – free preventive care, the requirement that individuals receive coverage regardless of preexisting conditions, the ability of young adults to stay on their parents’ insurance policies until they reach age 26 – because those provisions are overwhelmingly popular. So opponents go after the individual mandate instead.
In a recent New Republic piece, liberal health policy expert Paul Starr dubbed the individual mandate a “political blunder.” Starr contends that the aims of the mandate – the spreading of risk, the avoidance of free-riders – can be accomplished without the strict mandate that the Affordable Care Act enshrines. Jonathan Cohn summarizes Starr’s alternative – and proceeds to demolish it:
Paul understands and agrees with that basic logic. It’s the specific design of the mandate to which he objects. Under the Affordable Care Act, people with the economic means to pay for health care must obtain insurance or pay a modest fee to the government. (The government subsidizes the purchase for people who can’t afford the full price of a policy; it also exempts people with religious objections to formalized medical care.) Paul suggests that, instead of imposing this requirement, the government could simply have offered everybody a choice: People could opt to refuse insurance, but only if they were willing to relinquish the benefits and protections of the new law for a fixed period of time: For example, they would not be guaranteed coverage if they had pre-existing conditions. (An alternative would be to charge people late-enrollment fees.)
Such a policy, Paul says, would not have raised the same objections, politically or constitutionally. And it might work just as well, he says. As proof, he points to Medicare Parts B and D, the programs that cover outpatient services and prescription drugs. Those programs operate with similarly structured “soft” mandates. (That’s my term, not his.) And while Paul concedes a soft mandate in the Affordable Care Act would not work perfectly, he argues that the mandate already in the law will not be perfect, either. In fact, he says, it’s extremely weak – the financial penalties are small, enforcement is limited to withholding tax rebates – and unlikely to do much good.
It’s true that soft mandates work for the Medicare population. But does that lesson apply to the population that the Affordable Care Act’s mandate targets? There’s good reason to doubt it. Senior citizens are far more likely than younger Americans to anticipate medical risks. They aren’t the ones likely to avoid buying insurance when it’s available to them. Conversely, we do have one example of a hard mandate at work in the U.S. It comes from Massachusetts, which imposed a similar requirement as part of the reforms Mitt Romney signed while governor. The Massachusetts system has reduced the state’s uninsurance rate from around 10 percent to around 3 percent (or less, depending on which estimate you believe).
Cohn’s critique would apply to Republican proposals for a “free market” approach to health reform. David Fahrenthold of the Washington Post notes that since the passage of “Obamacare,” they haven’t done much to illuminate what the “replace” part of “repeal and replace” entails. But one much-ballyhooed plan, supported by John McCain during his 2008 White House bid, calls for a carrot-based approach: individuals would receive tax credits to buy insurance. Depending on the generosity of the credit, older people may well find it advantageous, but invincible young adults would not.
The individual mandate may make good policy sense in the context of a private insurance-based health care system, but that won’t much matter if the Supreme Court invalidates it in June. But if it’s disingenuous for conservatives who once embraced the individual mandate to now deride it as paving the path for totalitarianism, the legal arguments against the mandate’s constitutionality are equally opportunistic. Consider Sen. Chuck Grassley of Iowa, who championed the mandate before Obamacare’s passage but signed a congressional letter petitioning the Supreme Court to overturn it on constitutional grounds. Conservatives who aren’t seeking electoral advantage, like President Reagan’s Solicitor General Charles Fried and Reagan-appointed federal appeals judge Laurence Silbermann, defend the constitutionality of the individual mandate. Because certifiable conservatives like Fried and Silbermann uphold the mandate’s constitutionality, it’s not hard to envision swing-voting Justice Anthony Kennedy securing a pro-mandate majority on the Supreme Court. Slate’s Dahlia Lithwick speculates that even Chief Justice John Roberts could rule in favor of the mandate. Whatever decision the high court hands down next summer, the mandate will remain essential to making the health insurance market work.