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The mandate and backlash

Long ago, I'd predicted that if the GOP ever finished off the public option, they'd come at the individual mandate next. To my surprise, it's been some on the left who've launched an attack on the individual mandate. Indeed, last night, an activist friend angrily asked me why I thought I knew how to spend people's money better than they did, which is exactly the attack I'd expected the right to launch. My friend is a supporter of Medicare-for-All.

At the most basic level, Medicare-for-All and the House and Senate health-care reform bills are all coercive. Medicare functions through taxation. You pay your taxes, or you go to jail, or pay penalties. Affordability is dependent on getting the distribution of the tax burden right, which is no small task. Somewhat similarly, health-care reform functions through the mandate. You pay for insurance, or you pay a penalty (assuming that the monthly premiums would not be more than 8 percent of your monthly income, in which case you're exempt from the mandate). Affordability is dependent on getting the distribution of the subsidies right, which is no easy task.

There is, of course, a big difference between forcing people to purchase a private product and forcing people to purchase a public product. But not, I think, as big a difference as some have implied. Many of my progressive friends warn of a backlash that will overwhelm health-care reform, but would spare a reform plan with, say, a public option. That doesn't make sense to me. The comparison with Medicare-for-All, which I'd prefer to the current plan, is instructive. The idea that taxes do not cause backlash is belied by the past 30 years of American political history, which are largely the story of one sustained anti-tax backlash.

The mandate may also cause a backlash, of course. Particularly if both the left and the right are determined to foment one. But it is presumably worth considering that 220 Democrats in the House and 60 Democrats in the Senate managed to agree on this structure for health-care reform, while Medicare-for-All does not command a similar level of unanimity. After all, when we talk about a political backlash, we are talking about a backlash against politicians. But in their judgment, this plan is defensible, while a large expansion of Medicare was not something supporters could find sufficient votes to pass, or even to seriously offer. That is not an answer to the question of whether it is moral to mandate the purchase of something private companies sell. But it is a data point on whether this approach is a self-evident political loser.

By Ezra Klein  |  December 21, 2009; 1:17 PM ET
Categories:  Health Reform  
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Next: Jane Hamsher's 10 reasons to kill the bill

Comments

When your railing against the republican majority in 2011 you'll see the light. Here's more from FDL:

http://fdlaction.firedoglake.com/2009/12/21/senate-health-care-bill-is-built-on-obamas-broken-promises/

Posted by: obrier2 | December 21, 2009 1:34 PM | Report abuse

You mean to say we should respect the political judgment of many of the same folks who authorized the war in Iraq, the Patriot Act, and the bankster bailout?

Posted by: AuthorEditor | December 21, 2009 1:39 PM | Report abuse

This raises an issue I've been wondering about, what is the mechanism for the health care subsidies for low-wage workers?

Take your typical mid-20s, non-college-educated, low-wage worker. He/she is barely getting by in an almost-minimum-wage job. Now, the mandate is going to require purchasing private insurance (probably joining an employer plan).

While our mythical worker is probably eligible for subsidies, how do they work? Is the tax withholding automatically adjusted based on income, which means that this worker won't see much of a weekly change in income? Or is it a year-end tax credit thing (a disaster, since low-wage workers can't afford the upfront expense)? Or is it a direct subsidy you need to apply for, like WIC or food stamps, etc (much much worse, IMO, since this means most workers probably will never get the subsidy).

Posted by: WoofWoof2 | December 21, 2009 1:40 PM | Report abuse

political loser?

mandating a family of four to pay 20 percent of their income for the privilege of buying health insurance NOT HEALTH CARE from a corporation that spends 30 cents of every dollar on overhead that includes CEO and top executive salaries and bonuses that are obscene by and standard.

it is the ultimate political poison pill and proves how badly the democratic party got snookered by the GOP...

if Democratic Senators and Representatives can't see this and act to prevent what will unfold in 2010 then truly there is no better Republican than a Democrat in office and they will get deserved if not just reward.

Posted by: hughmaine | December 21, 2009 1:45 PM | Report abuse

@hughmaine, the Medical Loss Ratios in the House bill require that only 15% of every dollar can be spent on overhead, salaries, admin, etc. The Senate bill requires 20% in the small and individual markets, and 15% in the large group market. So, there are steps to make insurance plans more efficient at the same time the mandate is enacted.

Posted by: StokeyWan | December 21, 2009 1:51 PM | Report abuse


Is this a bit of a straw man debate? Is there anyone with a serious understanding of reform arguing to pull the invidual mandate?

Even the single payer people should be on board as the invididual mandate could one day serve as the single payer backbone. Even the occasionally nutso Dean and Feingold are fine with it.

You're at a real newspaper now baby. Don't punch below your weight.

Posted by: ThomasEN | December 21, 2009 1:55 PM | Report abuse

@thomasEN

"Even the single payer people should be on board as the invididual mandate could one day serve as the single payer backbone."

ah yes the long run...

"In the long run we are all dead"
—John Maynard Keyens

Posted by: hughmaine | December 21, 2009 2:00 PM | Report abuse

"There is, of course, a big difference between forcing people to purchase a private product and forcing people to purchase a public product. But not, I think, as big a difference as some have implied."

No, Ezra. It's the issue of forcing people to purchase a private product with *the IRS*, the perceived embodiment of Fearsome Big Government as its de facto collections agency. Except that you're paying for the dubious privilege of being uninsured. You think the low-paid workers who are entitled to the exemption will be well aware that the tax man isn't going to punish them for being uninsured? That's dumb policy and dumber politics.

Posted by: pseudonymousinnc | December 21, 2009 2:01 PM | Report abuse

@stokeywan

would the, "steps to make insurance plans more efficient..." rely on state insurance commissions?

good luck with that, another reason why the insurance company's stocks have soared.

Insurance companies know how to play this game and they are going to continue to play politicians, regulators and consumers like an orchestra.

Posted by: hughmaine | December 21, 2009 2:05 PM | Report abuse

Health care, if one does not have any insurance, can be very expensive and detrimental to ones health and well-being (bankruptcy)!

Remember, Cash for Clunkers? The money was gone in just a few weeks!

Likewise if the health insurance exchange is any good, people will opt for buying health insurance if the subsidies are structured in the correct fashion.

There should be no mandate!

If one insists on mandate then allow people to buy into Medicare. It would right away deal with the solvency of Medicare and reduce the national debt.

Ezra's arguments for mandate are not at all convincing.

Posted by: ns3k | December 21, 2009 2:07 PM | Report abuse

"That doesn't make sense to me."

This indicates a total lack of understanding of the left's true progressive wing.

We don't want to be forced into buying an inferior product from a private corporation--in my case one that has denied me access to insurance, and has reduced the quality of my health and life. And now you want to force me into a legal contract with them? That's like asking an abused spouse to go back and stay in a failed marriage.

Furthermore, the mandate is in effect a tax paid to and set by a private corporation, with the force of the IRS's power to levy taxes and fines and threat of jail as its collection agency.

No, the mandate isn't a threat to health care reform. It is a threat to progressive support for the democratic party--it's a political threat.

And as to the mandate, here's what Obama had to say about it during his campaign:

"During the campaign I was opposed to this idea because my general attitude was the reason people don't have health insurance is not because they don't want it, it's because they can't afford it. And if you make it affordable, then they'll come."

So now president Obama has flip-flopped on another campaign position. He's lost my support--financial, organizing and phone banking, and my vote. As has any other politician that supports the mandate.

The mandate must go!

Posted by: jc263field | December 21, 2009 2:08 PM | Report abuse

Honestly, you lefties never cease to amaze me.

Of course we need a strong individual mandate.

That is the only way to achieve universal coverage. Period.

Posted by: SisterRosetta | December 21, 2009 2:14 PM | Report abuse

Sister, it is not "lefites" generally, but Libertarians, a fancy word for selfish.

Posted by: Mimikatz | December 21, 2009 2:44 PM | Report abuse

If one insists on mandate then allow people to buy into Medicare. It would right away deal with the solvency of Medicare and reduce the national debt.

I am all for this. Let's pass this part through reconciliation next spring.

And for all this talk about not supporting dems because of this, remember the more good dems we send to congress, the less influence Stupak and holy joe have on the process.

Posted by: srw3 | December 21, 2009 2:45 PM | Report abuse

I consider myself a dyed in the wool progressive and also know a fair amount about healthcare. I have to say I'm confounded by the arguments by fellow "progressives" concerning healthcare reform. There seems to be very little intellectual rigor (e.g. reading of the actual bills or serious analyses thereof) and a whole lot of sloganeering that makes no sense. Anyone who is against the individual mandate, please point to another country that has 100% universal health care coverage without making it "mandatory". If the coverage isn't mandatory then individuals will opt out (free rider problem) expecting to get healthcare in emergencies (like is the status quo) undermining the whole system. Worse yet, not making health coverage mandatory allows a large number of people to make the "choice" to go without health coverage, thereby playing roulette with their lives (I say the odds are I won't come down with a life threatening illness this year, I'm healthy.....). Illness is essentially random and none of us can predict when we will become ill, injured, etc. Progressives arguing for the continuation of the current system by voting down this bill is one of the most disheartening political developments this decade (there is alot of competition for that "honor").

Posted by: alan24 | December 21, 2009 2:46 PM | Report abuse

SisterRosetta,

Sure, I definitely agree. But the reason that the mandates were palatable in the first place was the existence of the public option. Remember, if the private insurance plans were so great and affordable now, no one would be uninsured in this country. But of course that's not the case. And unfortunately, the subsidies aren't enough to cover the total cost of insurance for most people (something that Ezra and Jon Cohn readily admit to). So essentially, this admits to an additional tax on people who can barely afford to put food on their tables. What do you think is going to happen in November when people realize this?

And I highly, highly doubt that this or the next Congress will re-visit the issue insufficient of subsidies. Especially if the deficit hawks take over.

Posted by: urbanempire | December 21, 2009 2:48 PM | Report abuse

Of course the reason people don't see the mandates as being equivalent to taxes is that the proceed go to THOSE DASTARDLY INSURANCE COMPANIES instead of our 'benign' Federal Government. How people feel generically about "Corporations" has almost everything to do with how objectionable they find the current bill vs the one they would have supported.

Posted by: PhD9 | December 21, 2009 2:49 PM | Report abuse

The purpose of the mandate is to spread the risk and therefore premiums. That's a basic principle of insurance. As for the government forcing people to buy coverage from a private company, that's done now with car insurance. Why? For damages caused to another person's property or person. This mandate is get people coverage, where some people will have regular doctors visits, some will seek treatment early in the event of an illness, some will be fairly healthy for years and others will wait and seek treatment when illnesses are more advanced. So one must find ways to control cost of services as well as premiums, mandates is one tool.

If the Left care about the working poor, fighting mandates and organizing backlash actions is just to cut of your nose to spite your face. Just because you don't want the private insurance industry to get your money doesn't help the people you claim to be fighting for.

You should understand why certain provisions were included, get familiar with the details of the bill that will pass and fight to tweak it, to add more controls on the companies for the very fact that the government is helping them gain new customers. Because of the mandate tighter scrutiny and controls are required and justified.

Also, any backlash against Democrats because of no public option or supporting the Senate bill is counter intuitive given the despicable actions of the republicans and some conservatives Dems. If anything there needs to be more Democrats in the Senate to reduce the power of Nelson and Lieberman.

Posted by: wshudley | December 21, 2009 2:53 PM | Report abuse

Am I right that reform will likely consist of
- no public option
- an individual mandate
- a ban on insurance discrimination, and
- subsidies for the poor?

If that is correct than this is exactly what Switzerland got in a somewhat similar political constellation (except that in that case, the reform was actually supported by conservatives). I expected something along these lines all along. It is still surprising that nobody here (with a few exceptions) talks about the Swiss model.

Posted by: carbonneutral | December 21, 2009 3:03 PM | Report abuse

"anyone who is against the individual mandate, please point to another country that has 100% universal health care coverage without making it "mandatory"

Don't use the phrase "intellectual rigor" in the same post with your above statement. As you should know perfectly well, every other country that has Universal coverage also strictly regulates their insurance companies and every one of them has negotiated significantly lower pharma prices. Those governments understand the contract: we make you "buy in" via premiums or taxes, and exchange the government sees to it that people can afford coverage and can be confident that, when sick, their insurance coverage does not have to be the uppermost concern in their minds. This version of the bill is nowhere close in terms of the absolute certainty people in other countries enjoy.

Posted by: Melinochis | December 21, 2009 3:09 PM | Report abuse

I'm a Jacksonian Democrat who considers it to be fascism when the government is in cahoots with big business. I will NEVER vote for another Democrat until the mandate is changed to include a public option.

Posted by: bmull | December 21, 2009 3:13 PM | Report abuse

"Remember, if the private insurance plans were so great and affordable now, no one would be uninsured in this country."

You are glossing over the problem of denied insurance. You won't be able to stop discrimination based on existing conditions unless through an individual mandate.

Posted by: carbonneutral | December 21, 2009 3:22 PM | Report abuse

Those wonderful countries with mandates also have much higher-quality insurance that is generally less than half as expensive per person as in the U.S., plus those countries have much better subsidies for the poor and middle class, and better social safety nets in general. Our mandate forces people to buy inadequate insurance they can't afford from poorly regulated private companies that have a track record of doing everything possible to not provide coverage. That's the difference.

Posted by: AuthorEditor | December 21, 2009 3:31 PM | Report abuse

Melinochis - "This version of the bill is nowhere close in terms of the absolute certainty people in other countries enjoy."

So what? We throw it out? What should change? Would you please give specific changes, excluding the words single-payer, public option and getting rid of mandates because the first two are not possible, at this point, and the third is necessary to help control cost. 30 million Americans are waiting for your alternatives.

Posted by: wshudley | December 21, 2009 3:34 PM | Report abuse

But Ezra, you yourself have posted before that the subsidies are not adequate. With adequate subsidies, the mandate will work, without them, it will be very unpopular.

Posted by: tyronen | December 21, 2009 3:37 PM | Report abuse

AuthorEditor,

Since Americans, who are not covered by a group plan, are now required to buy insurance wouldn't more scrutiny be required. The fact that insurance companies are poorly regulated is not a valid reason to remove the mandate. There is a fundamental insurance principle for mandates but it also opens the door for citizens to make sure there are tighter Federal and State governments regulations controlling insurance companies.

Posted by: wshudley | December 21, 2009 3:44 PM | Report abuse

I wish folks would stop with the "car insurance" argument. If you believe health CARE is a right rather than a privilege, the car insurance analogy is pointless.
I think there'd be a lot less worry about individual mandates if the bill included: (1) sufficient regulatory oversight of providers (NOT oversight dispersed to the states, whose resources and commitments will be variable, and which will be very difficult for the public to monitor), (2) an equivalent "mandate" on controlling actors in the health care industry, (3) reduction/elimination of the proposed surtax on employer-based comprehensive health insurance (the manipulative "Cadillac plan" concept completely misrepresents the targets of those taxes: not everyone with a good health plan is a Goldman executive; most aren't, in fact). To be clear, I'd love to see the end of the employer-based system, but it should be replaced with something both comprehensive AND affordable. With so many promises that were once avowed or implied now dropped out of the Senate bill, people are more confused that we were in the first place. We're worried that this isn't going to work out well -- that cost will continue to creep up to unaffordable levels and that many people will end up where we're forced to pay private business for a product that won't offer genuine protection. That's not an illegitimate fear at this point and in the current political climate. Big promises were made. But a process that was supposed to be transparent was marked from the beginning by side deals to get "buy-in" from "stakeholders", and opposition politicians were allow to dissemble about what reform would mean. I suppose that's the way things work now -- and it's why people worry. I try to be hopeful, but if the republicans do well in the next election cycle, we can wave goodbye to our hope for building on this bill.

Posted by: sandrine1 | December 21, 2009 4:07 PM | Report abuse

Loss of health insurance is in itself coercive enough for people to buy healthcare when it becomes affordable. There is not need for mandates at this stage. We will know when the health care exchange becomes operational if the subsidies are sufficient to entice enrollment of the populace.

When we get to universal coverage (Bernie Sanders single-payer system for e.g.,) then we can have payroll deduction to pay for health care. I would gladly pay for it then at even higher than the 2% increase suggested by Senator Sanders.

I do not like punitive legislation in general: it suggests that Americans will not do the right thing and need to be forced into the system. This is a shameful part of the legislation and most controversial. More people would support the legislation if there was no mandate at this stage of the game.

Finally, all legislators must be compelled to enroll into the exchange to demonstrate to the public that this would be a good deal for everyone!

Another reason this bill is viewed with suspicion by many is that it was written from the ground up instead of expanding an already existing and time-tested program (the Federal Health Insurance scheme or Medicare). This lead to gaming of the whole process with creation of endless loopholes to lobbyists and special interests; and giveaways to individual states. It became business as usual in Washington and WH. The whole process was a shameful spectacle and completely negated the 'Change has come to America' that was proclaimed on the night of the election.

Say no to Mandates!!

Posted by: ns3k | December 21, 2009 4:12 PM | Report abuse

But it is presumably worth considering that 220 Democrats in the House and 60 Democrats in the Senate managed to agree on this structure for health-care reform, while Medicare-for-All does not command a similar level of unanimity.

That's a bit disingenuous, don't you think? Medicare-for-all, or even for those over 55, was never offered in the House, so we have no idea how popular it might have been.
As for the Senate, this bill was "popular" only because for profit healthcare was bought off.
I don't know as that I consider that cause for celebration.

Posted by: flory | December 21, 2009 4:37 PM | Report abuse

"Anyone who is against the individual mandate, please point to another country that has 100% universal health care coverage without making it "mandatory". "-- alan24

Excuse me but what is being pushed here is *not* universal heathcare. What we have is a mandate that affects only a small part of the population whereas the whole point of *universal* systems is that everyone is in the same boat. There is no universal health care system that excludes 80% of the population from the actual workings of the system.

I have no problem with an actual universal mandate -- e.g. including health benefits as compensation with a *universal* exemption up to a certain limit (plus a credit for those who actually pay their own way -- as a way to finance universal care.

What's going on here though, is a mandate for those who are already disadvantaged for coverage while the employer-paid benefit population is protected from the consequences.

And none of it has anything whatsoever to do with universal *care*. The liberal/progressive/Democratic/[whatever you want to call it] made a mistake when they conflated insurance with care and we're all going to pay for that mistake 4 or 5 years from now.

Posted by: Athena_news | December 21, 2009 4:40 PM | Report abuse

But Ezra, most of the Democrats in the House voted for a plan that included a public option. You say "in their judgment, this plan is defensible," but I'm pretty sure a lot of House Dems DON'T think that.

As urbanempire says above, "But the reason that the mandates were palatable in the first place was the existence of the public option."

That's the crux of the matter that all the wonks who rightly defend the concept of the mandate are nevertheless overlooking.

Hillary Clinton's plan famously included the individual mandate, BUT ALSO called for a "quality public plan option similar to Medicare" AND for opening the FEHB program to the public.

Edwards' plan required an individual mandate only AFTER his reforms, including an employer mandate, took effect and made coverage affordable. This closely tracked Obama's philosophy at the time.

What's more, Jacob Hacker himself wrote at the height of the primary battle that, in the case of the Obama and Clinton plans, both of which built on the employer-based system and required an employer mandate, an individual mandate was "valuable" but not "essential."

http://www.latimes.com/news/printedition/asection/la-oe-hacker26feb26,0,775241.story

What WAS essential, however, was a public plan:
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf

"Third, public plan choice is essential to set a standard against which private plans must compete. Without a public plan competing with private plans, we will continue to lack strong mechanisms to rein in costs and drive value down the road. As a benchmark, a new public plan alongside private plans will help unite the public around the principle of broadly shared risk while building greater confidence in government over the long term. "


Obama's most serious mistake was in regarding the public option as an add-on feature, a "sliver," and not a touchstone: a foundational necessity.

Posted by: andrewlong | December 21, 2009 6:41 PM | Report abuse

What amazes me about the liberals who are against the individual mandate is that they think they are doing lower income people and the middle class a favor.

Like if they succeed they can say, "There, I helped you, you now have no health insurance. No need to thank me."

The bill makes health insurance inexpensive enough (or free with Medicaid) for the poor and middle class that virtually anyone is better off having health insurance than not. This is especially true in light of positional/context/prestige externalities (see http://www.robert-h-frank.com/PDFs/WP.1.24.99.pdf and http://www.aeaweb.org/articles.php?doi=10.1257/000282805774670392). If everyone in your peer or reference group is forced to buy health insurance, then they all have less to spend on housing, so housing prices are lower. They all have less to spend on cars, so you can purchase a less expensive car without feeling too low prestige, etc., etc., for most goods.

Posted by: RichardHSerlin | December 22, 2009 12:42 AM | Report abuse

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