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Should Democrats Give Up on the Individual Health Insurance Mandate?

3 years ago
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The most controversial part of the Affordable Care Act is its requirement that, starting in 2014, almost everyone in the country has to buy health insurance. The left calls it a sop to insurance companies, the right calls it unconstitutional, and polls show that the public opposes the requirement 2 to 1.

Could the "individual mandate" disappear? And would that unravel the whole health-care reform law?

House Republicans are poised this week to pass the "Repealing the Job-Killing Health Care Law Act," though perhaps in a more "thoughtful" mode than was contemplated before the Arizona shootings put politicians on notice to mind their rhetorical manners (the bill was named pre-Arizona). Plan B, given that Democrats still control the Senate and the White House, is chipping away at the law. And the mandate is top of mind for Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee.

Upton told the American Enterprise Institute he expects "a number of Democrats" who vote against repeal of the overall law to support repeal of the individual mandate. Asked about "critics" who say removing the mandate would make the law unworkable from an economic standpoint, Upton said he wouldn't call them critics because unraveling the law would be "a good thing."

Health careThe core concept of insurance is getting everybody in the pool to spread out costs. In automobile insurance, that means good drivers and bad, young drivers and old. With health insurance, it means young and old, strapping and sick. The question is whether the young, the healthy, the libertarian and those with modest incomes will buy insurance absent a requirement backed by a tax penalty (as the new law imposes).

As a candidate, President Barack Obama did not include a mandate in his health plan. He said people would purchase insurance for themselves and their families if there were subsidies to make it affordable. Insurance companies, which can't cherry-pick customers under the new law or abandon those who get sick, weren't so sure. They predicted skyrocketing rates without the requirement, as only those with health problems would sign up to buy policies.

The insurance companies prevailed, but more than 20 states are now challenging the constitutionality of the mandate in cases expected to land at the Supreme Court. They center largely on whether the mandate falls under federal authority to regulate interstate commerce.

Conservatives argue that Americans cannot be penalized for choosing not to buy a product. A liberal lawyer friend of mine counters that they are trying to preserve the right to make others pay for their medical care. He has a point. People with insurance subsidize care for the uninsured through higher taxes, higher medical costs and higher insurance costs – about $350 per person per year, according to a non-partisan 2008 study.

Federal judges are delivering mixed verdicts on the constitutionality of the mandate as the cases wend their way upward. In the meantime, conservatives have a potent political issue and Democrats are stuck defending the least popular part of the law.

A few have started hedging, raising questions about whether it must and should survive. Sen. Claire McCaskill of Missouri says she's open to alternatives. "There's other ways we can get people into the (insurance) pool -- I hope -- other than a mandate, and we need to look at that," she said this month on MSNBC's "Morning Joe." McCaskill is one of several centrist Democratic senators facing difficult re-election races next year in conservative states.

Former Vermont Gov. Howard Dean, a liberal, a medical doctor and the former chairman of the Democratic National Committee, says the mandate is "doomed" because "Americans can't stand being told what to do, no matter what party." Holding up the example of his state's program to insure all children up to age 18, Dean also says it's not needed. He says 96 percent of children in his state are covered, demonstrating that people will "do the right thing" without a mandate.

Dean bolsters his point by noting that the coverage level is about the same as in Massachusetts, which has a universal coverage law and a mandate to buy insurance. But the focus of the Vermont program is parents buying coverage for their children, so it's not a direct comparison. In addition, a new study of Massachusetts suggests the mandate is a major factor in why so many people have insurance.

Massachusetts started phasing in its mandate in 2007, giving people a year to buy coverage before penalties kicked in Dec. 31. The authors said people who signed up at the beginning of the year were more likely to be older and chronically ill. At year-end, with penalties imminent, "there was an enormous increase in the number of healthy enrollees," they wrote in The New England Journal of Medicine. They concluded that "the mandate had a causal role in improving risk selection."

And that was with Massachusetts subsidies, which are larger than the ones provided in the federal law. The authors say the mandate will play an even more pivotal role at the federal level in prodding people to buy policies, given the smaller subsidies.

What if the mandate disappeared? Could you get a broad enough pool to spread the risk, as McCaskill suggested? Some say there are ways to to make it happen. Here are three ideas:

-- Dean suggested a limited open enrollment period each year for people who don't have employer-provided insurance. They could buy individual policies on new health insurance exchanges, the competitive marketplaces that come on line in 2014, for that limited period. If they didn't, they'd have to pay out of pocket for any care they needed that year and risk financial ruin.

-- Princeton sociologist Paul Starr would let people opt out of buying insurance, but for a price. They'd have to sign a waiver on their tax return saying they would be ineligible for federal subsidies for a certain period of time, such as five years.

-- Gail Wilensky, who ran the Medicare and Medicaid programs in the George H.W. Bush administration, says people in Medicare's prescription program are charged more if they don't enroll when they first become eligible then decide to sign up later. A similar plan for health insurance – say three to five years of higher fees – would up the ante for people who don't buy insurance until they are sick, Wilensky told Kaiser Health News, and could be "more effective than a wimpy mandate."

Some of those ideas seem to me to raise the same points the lawsuits are challenging – that is, does the government have the right to penalize people for not buying a private product? The Medicare template is interesting, but it relates to a government program (which the government surely has a right to regulate). Also, like car insurance, which you can avoid buying if you don't have a car, it is voluntary -- people can buy Medicare prescription coverage, private coverage or none at all.

Beyond that, supporters of the mandate say the proposed alternatives don't solve basic problems. The insured would still be subsidizing the uninsured, and costs would continue to rise as healthy people stay out of the pool. MIT economist Jonathan Gruber, in a study for the liberal Center for American Progress, said insurance companies in five states are operating under patient protection requirements much like those in the federal law, but without a requirement that everyone buy insurance. He said "those five states are now among the most expensive states in which to buy non-group insurance."

Citing projections by the non-partisan Congressional Budget Office, Gruber said removing the federal mandate would mean only 10 million more people insured, compared with 32 million under the new law . He said the healthiest people wouldn't buy coverage, and premiums for individual policies on the insurance exchanges would be 40 percent higher.

Confession time: I started researching and writing this piece with the idea that Democrats would be smart to get behind a moderate alternative to the individual mandate. In fact, I even pre-wrote a conclusion. It would be, I said, a win-win. Republicans would look constructive and achieve a key goal. Democrats would look moderate and the issue would lose its political power, even if the court challenges continued.

But I've come to think hanging in is worth the political cost to Democrats. Studies show it's the most effective option. In the only real-life experiment we have, in Massachusetts, it apparently is working. And if another approach is tried first and fails, after this siege, it's hard to believe Congress would ever have the political will to reinstate a mandate.

There is always the chance the Supreme Court will strike down the mandate as unconstitutional. If the problem is making people buy a private product, it's easy to imagine Democrats mobilizing with unprecedented resolve to add a public insurance option -- maybe Medicare available for purchase by people of any age -- as a choice on the exchanges.

If courts dismantle the health law, it's also easy to imagine a new drive for a single-payer "Medicare for all" system. That would put everyone in the pool automatically, and we already know Medicare is constitutional. Perhaps conservatives ought to return to their one-time support for a mandate. It's a lot closer to their idea of a market-based America than where we could be headed minus a mandate.

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Filed Under: Analysis

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Kenneth

If they want to repair the system then go after the problems. fraud, overbilling, stupid law suits that are settled out of court. Many lawyer will take these cases knowing that insurance companies will settle.Just making everyone pay for the service will not make it affordable.You have doctors not assigned to a patient visit the room and talk to the patient and then bill for a consultation. I have received bills that state 6 days when the hospital say was 2. Medication on bills that were not given.Perfect example. My father in law was put in the hospital for a run away pulse rate. They kept him in the hospital for 7 days, they did nothing more then monitor his vitals and draw blood to find out he had an over active thyroid. He was mailed a bill for 77,000 for that service. One year later he had bypass surgery on medicare . The total bill for the surgery,hospital stay will all med issued was 17,000. These hospitals and insurance companies are running without regulations. This is nothing more then a scam on the American people with law enforcement and politicians turning their backs for political contributions.

January 18 2011 at 12:29 PM Report abuse +2 rate up rate down Reply
barney2022

Ms. Lawrence...well good to see your "confession time". Now, I truly think you should apologize to Limbaugh, Palin, etc as you were one of the first ones to throw blame their way after the AZ shootings. So be a responsible journalist because you cant just make claims and then expect people to forget when you decide its over. Even President Obama agrees with me on this one...so lets hear it.

January 18 2011 at 12:06 PM Report abuse +4 rate up rate down Reply
benjaterr

It would seem a middle answer is somewhere among the differing views. Being punitive for not carrying insurance is similar to car insurance as the costs of injury in an accident are similar in complexity given the myriad of medical conditions that arise without notice. Diseases occur at any age, can be symptomless, sudden, and may result in death or long term disabling conditions. Medical providers and insurers are forced to compete for business from consumers like the car insurance industry. One can opt to receive medical insurance or not. States requiring auto insurance exact penalties for no coverage. Individuals can choose among insurance carriers and determine the amount to use toward health coverage. In general, no one complains of paying auto insurance and do so to protect themselves and their families; is medical insurance any less important to families, our children, and those affected by permanent injuries from uncovered auto drivers? People covered under medical plans feasibly pay less if medical insurance purchases are discounted for buying other insurance lines such as for children or dependent other individuals in a family. For record of good health habits, medical costs are discounted similar to car insurance. Perhaps the model of medical care coverage can be learned by insurance providers of life, disability, home, auto, non-smoker, etc...

January 17 2011 at 11:33 PM Report abuse +2 rate up rate down Reply
signalmercedes2

to start with medicare does not cover but 8o% of your bill then you have part d that315 month wifes is 420 a month 7s about 1300 a year then you have to have a gap insurnce to pay the other 20% ou your bill 185 a month mine re re cost about 320 a month altogether my wifes cost about 420 together 760 a month to have medicare hows is that a dam good deal ? if you thjink so go for it lol

January 17 2011 at 8:57 PM Report abuse +3 rate up rate down Reply
jtzeph

The Mass. health care law is a disaster and will deny Mitt Romney the 2012 Republican nomination.

January 17 2011 at 7:20 PM Report abuse +8 rate up rate down Reply
1 reply to jtzeph's comment
dc walker

....or maybe he sees the mistake he made in giving in to Massachusetts Democrats and won't make the same mistake twice.

January 20 2011 at 9:23 PM Report abuse rate up rate down Reply
Michael

The individual mandate is not constitutional. If Democrats or anyone else wants to amend the constitution to grant that unprecedented power to the government, the appropriate and legal path would be to do so. Pushing an unconstitutional bill through by "whatever means necessary", as the Democrat congress did in the dead of night last year, is not sufficient.

January 17 2011 at 7:01 PM Report abuse +11 rate up rate down Reply
honey/vinegar

I find it quite amusing that some folks think medicare is the answer to Obamacare. I am on medicare and believe me when I say it sucks! Since a portion of Obamacare kicked in at the begining of 2011, medicare has notified me that 2 out of my 4 prescriptions, which I have taken for the last 6 years, will no longer be covered. I still have to pay a monthly premium to medicare just in order to have the basic coverage. A single-payer system......No thanks. Be careful of what you wish for, you just might get it!

January 17 2011 at 5:59 PM Report abuse +11 rate up rate down Reply
3 replies to honey/vinegar's comment
browse62

Heres' a thought. Mandate that all employers provide a minimum level of health insurance while at the same time adding a tax or taffiff to foreign goods from any country that does not also require that all employers provide the same amount of health insurance. This would allow US companies to remain competitive with foreign comlpetition. Not only does this protect American jobs and their employers it would also provide significant revenue to the Federal government whow could use it to help fund indigent patient care. It would make foreign goods slightly more expensive, but if we keep loosing jobs to China, India, etc. we will have a crisis in this country that makes the health care issue pale in comparison.

January 17 2011 at 5:52 PM Report abuse +5 rate up rate down Reply
peterstolzfl

The only problem with the public option or Medicare for All is that the Republicans control the House now and have more votes in the Senate than they did when health reform narrowly passed. There is no chance of the House passing a public option or Medicare for All and the Republicans could more easily filibuster it in the Senate if it ever got there, than they could before. So the last 2 paragraphs of the article are totally unrealistic. Dems should have gone for Medicare for All to begin with. It's the only program that makes any sense and is simple to understand. Just think about it this way. Access to quality health care can be a matter of life and death. If we believe that no American should be denied access to quality health care just because they are too poor to afford treatment, then the simplest and most efficient way to handle it is to give everyone Medicare and pay for it out of tax revenues for those who can't afford any premium. To make it equitable we should simply impose a sliding scale of premium fees for those earning higher incomes who can afford to pay for their coverage and give it for free to those who can't afford it. Why make it complicated when this is the most efficient program around. Private insurance companies can offer supplemental policies just as they do now, as well as Cadillac policies for those who want more than Medicare offers.

January 17 2011 at 3:55 PM Report abuse -4 rate up rate down Reply
1 reply to peterstolzfl's comment
sk8ingvolcom

"To make it equitable we should simply impose a sliding scale of premium fees for those earning higher incomes who can afford to pay for their coverage and give it for free to those who can't afford it." Give something to them for free. What ever happened to the idea that you work hard to get what you deserve. We can't all sit at home, play video games and watch Oprah. If you want health care. Dont buy that 58" flat screen, don't buy a Lexus or Mercedez, buy a Geo Metro...now you can afford to pay for your health insurance.

January 17 2011 at 8:27 PM Report abuse +5 rate up rate down Reply
franplatt

All this turmoil could have been avoided from the get-go had Congress and the Administration had the spine to put forward a single-payer system such as most of the rest of the Free World has. These systems actually work quite well - never mind the false scare stories that people are believing simply because they hear them repeated too many times by people who have an interest in keeping the insurance industry so rich. Anybody who repeats the canard that 'America already has the best health care system in the world' is lying to you - read the statistics.

January 17 2011 at 3:52 PM Report abuse -1 rate up rate down Reply
2 replies to franplatt's comment
honey/vinegar

fran....The reason I live in the United States of America is because I don't want to be like the rest of the "free" world. Where are you getting your info concerning the best health care in the world? If what you say is true, that here in the US we have terrible health care, then why do so many of the world's rich and famous come here for medical treatment? Think about it.

January 17 2011 at 5:42 PM Report abuse +6 rate up rate down Reply
sk8ingvolcom

please post these "statistics"

January 17 2011 at 8:29 PM Report abuse +1 rate up rate down Reply

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