Mandate Myopia

Back in the early 1990s when health reform went down in flames, there was one word that kindled rage in the hearts of reform’s opponents: “mandate.” This time around, Democrats insisted they would relegate the offending word to the dustbin of history. Now, employers would have a “choice” of providing coverage or helping their workers pay for it (no mandate there!), and Americans would get to pick their health plans from a new “menu” of options (just like at Denny’s!). Universal health care had a kinder, gentler face.

So why in the world are presidential candidates Barack Obama and Hillary Clinton beating one another up about, of all things, health care mandates? Clinton has said that Obama’s plan would leave millions more uninsured than hers, because it lacks a requirement that all adults obtain coverage (a so-called individual mandate). Meanwhile, Obama’s campaign has countered—in a mailing that’s, sadly, a preview of what Republicans will say about mandates of any sort—that a mandate would amount to forcing people to buy coverage they can’t afford.

Join Jacob S. Hacker at the Take Back America conference March 17-19 and help move the universal health care debate forward.
 
[1]
 
RELATED: Lewin Group affirms [2] that Hacker's Health Care for America plan leads to universal coverage.

For anyone who follows health policy, it’s a sordid spectacle. For anyone who doesn’t, it must be totally incomprehensible—like watching two rocket scientists boil a discussion of space travel down to a squabble over the angle of reentry. And yet, arcane as it may seem, the debate carries real dangers. Fourteen years after President Clinton tried and failed to achieve universal coverage, Democrats are making the same old mistake of letting technical litmus tests blind them to the larger challenges they face on health care.

The current enthusiasm for individual mandates rests almost entirely on the experience of single state: Massachusetts, which was implementing an individual mandate just as Democrats were formulating their campaign plans. Never mind that the Massachusetts law has proved to be a mixed bag, with hundreds of thousands of residents still uninsured despite the mandate. A consensus was born that the mandate was the key to an odd-bedfellows coalition of Democrats and Republicans, conservatives and liberals, progressive activists and business leaders.

This consensus is largely mythical. Republicans—including Mitt Romney, who supported the mandate as governor of Massachusetts—have raced away from the idea faster than a speeding bullet point. Instead, top Republicans (and yes, that includes John McCain) are calling for the encouragement of Health Savings Accounts and new tax breaks for individually purchased insurance—a far cry from even the relatively minimal Massachusetts approach of requiring that people obtain coverage and regulating insurance to ensure its availability.

Or consider California, where reform efforts fell apart last year. There, the individual mandate turned out to be not the key to compromise, but a major sticking point—with many of the strongest supporters of reform reasonably worried that cash-strapped workers would be compelled to spend a huge share of their income on private insurance that provided them with little real protection.

What’s clear from the abortive California battle and the checkered Massachusetts experience is that the individual mandate is no silver bullet, in policy or political terms. On its own, an individual mandate is either cruel or chimerical, forcing people to buy bad insurance that costs too much or failing to achieve its goal of universal coverage. Insurance needs to be affordable, and enrollment easy and automatic, for an individual mandate to work.

And thankfully, that’s the role the individual mandate plays in Senator Clinton’s plan. For all the shrill back and forth, both Clinton and Obama have focused their proposals on requiring employer contributions, signing up people for subsidized coverage through employment and public programs, and creating a new set of insurance options for those without workplace insurance, including a Medicare-like public insurance plan that can provide guaranteed coverage inexpensively.

All this is wise. It reassures Americans that they can continue to be covered by workplace insurance if their employer provides it, while also ensuring they have access to an affordable guaranteed plan—a plan similar to, but more comprehensive than, the popular Medicare program. Moreover, this approach can restrain premiums much more effectively than proposals that simply rely on private insurers, as does the Massachusetts plan. And if done right, it can automatically cover nearly all Americans through the workplace, as is true for most working-age Americans who have private insurance today.

Thus, the mandate melee obscures the truly important features of Obama’s and Clinton’s plans—how they would enroll people, how they would ensure premiums for coverage were low, and how they would keep costs down over time. Neither of the candidates has really answered these questions. Obama, for example, has not forthrightly endorsed so-called automatic enrollment through the workplace, in which people are required to opt out of coverage rather than opt in. And both plans exempt small businesses from the requirement that they must offer coverage or contribute on behalf of their workers. Given that most of the uninsured work for small firms, this exclusion could turn out to be as much of an obstacle to universal coverage as the Obama plan’s lack of a mandate for adults.

But the policy objections are somewhat beside the point. The deeper problem is that Democrats are once again arguing about the least salable aspect of their vision for reform. And they’re fighting over small internal differences, instead of taking on the starkly divergent Republican vision on health care. This doesn’t just mean missing the real challenges that reformers confront. It may mean missing the chance to finally address an issue that has bedeviled Democrats for decades.