The Mandate

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Will

Will writes from Washington, D.C. (well, Arlington, Virginia). You can reach him at willblogcorrespondence at gmail dot com.

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159 Responses

  1. Avatar Robert Cheeks says:

    Best damned blog been written here in a while!Report

  2. Avatar Michael Drew says:

    Did Erik defend it on libertarian grounds? He all but endorsed single-payer as far as I could tell. So I’m thinking the answer might be no.Report

    • Avatar MFarmer in reply to Michael Drew says:

      “Did Erik defend it on libertarian grounds?”

      No. I think it’s clear that Erik is no libertarian, at all.Report

      • Avatar E.D. Kain in reply to MFarmer says:

        I’m a civil libertarian with free market pragmatism built in, but I’m no card carrying libertarian, Mike.

        Will, a lot of things scare me a lot more than a fairly boilerplate healthcare mandate. Germany, the Netherlands, Switzerland…all countries with a mandate of some sort. Singapore has mandated savings. Actually Social Security is essentially mandated savings. We have plenty of precedence for mandates. I don’t like the corporatism but I don’t see it as unconstitutional.Report

    • Avatar Will in reply to Michael Drew says:

      “Libertarian grounds” may have been a poor choice of words. I think everyone who self-identifies as a liberal (to say nothing of conservatives) should be suspicious of sweeping new federal powers. Questions of constitutionality also transcend narrow libertarian concerns.Report

      • Avatar MFarmer in reply to Will says:

        Absolutely Will. That’s been my position for quite awhile, and it’s why I’m dissappointed in liberals, moderates, Big Goverment Republicans, whatever — any American citizen who rolls over and takes this crap, even embracing the crap. Now, Prof. Fried says the government CAN force us to buy broccoli. Enough is enough, but, obviously not for some.Report

        • Avatar ThatPirateGuy in reply to MFarmer says:

          Mike, I see you are are of Prof. Fried’s testimony.

          Did you see the part where he discussed this exact argument and how it “proves too much.” It makes romneycare unconstitutional since states still have to abide by the 14th and 15th amendment.

          Unconstitutional is not a synonym for immoral, freedom destroying, or bad policy.

          Constitutional is not a synonym for moral, freedom enhancing, or good policy.

          The constitution isn’t magic. Really bad policy can be enacted including 100% tax rates with equal tax credits for all(i.e. communism) are constitutional. They wouldn’t be freedom enhancing in the least. They would be horribly oppressing. But they would be constitutional.

          Can you tell me why they wouldn’t be?Report

          • Avatar MFarmer in reply to ThatPirateGuy says:

            I don’t know what you are talking about, but do you think the Constitution allows government to force us to buy brocolli? A yes or no will do.Report

            • Avatar ThatPirateGuy in reply to MFarmer says:

              Yes,

              Far more legitmately than they can “force” us to raise children which they have been doing for years.Report

              • Avatar MFarmer in reply to ThatPirateGuy says:

                The government forces you to raise children? Huh? I missed that mandate.

                So, you say, yes, the Constitution allows government to force us to buy brocolli. Amazing.Report

              • Avatar gregiank in reply to MFarmer says:

                The Gov can force you raise your children up to a certain standard. You have to educate them, get them vaccinations, can’t beat or abuse them to much and are responsible for what they do for 18 years. If you don’t do those things the Gov will do it for you.Report

              • Avatar MFarmer in reply to gregiank says:

                Greg — you are comparing the protection of children’s rights as human beings to forcing us to buy brocolli? The education and vacination parts I understand, but beating and abusing? Hell, I can’t even beat and abuse my wife — something about violating her basic rights or some such nonsense. Seriously, though, are you sure about the brocolli thing being Constitutional? I draw the line at brocolli — I’m not even sure if I’m spelling it right.Report

              • Avatar ThatPirateGuy in reply to MFarmer says:

                Indeed they do via the same mechanism of the so-called mandate.

                They charge me higher taxes for declining to raise children.

                I.e. A non-child raising penalty.

                I also get a non-church donating penalty, a non-corn grower penalty, I think you can see where this is going.

                Indeed if the government were run by truly wicked men they could set the income tax at 100% for the 100k and below bracket and truly force me by offering a deduction of my 70% of my income for having children as the only possible deduction.

                You tell me that isn’t forcing me to have children. Also tell me what in the constitution would prevent congress from enacting and the feds from enforcing it. It would still only be tax policy though.Report

              • Avatar MFarmer in reply to ThatPirateGuy says:

                “They charge me higher taxes for declining to raise children.”

                Oh, I see what you are saying — they penalize you for not raising children. This is wrong, isn’t it?Report

              • Avatar MFarmer in reply to MFarmer says:

                It’s just as wrong as forcing you to buy insurance or broccoli, isn’t it? One thing about being consistently against statism is that I don’t have to get caught up in this “Well they do it here, and here, and this way, and that way”. Yes, I know, it’s all wrong.Report

              • Avatar ThatPirateGuy in reply to MFarmer says:

                Again Right and Wrong and not the same words as Constituitional and Unconstitutional.

                Before the 14th amendment we could have slaves. All I ask is that people stop screaming their heads off about constitutional issues that don’t exist. Go ahead and tell people that the policy is wrong and evil I disagree but that is democracy for you.Report

              • Avatar MFarmer in reply to MFarmer says:

                I’m saying the mandate is wrong and unconstitutional, esp the brocolli mandate. So, any thing that is constitutional is not the same as being unconstitutional, although it might be wrong.Report

              • Avatar ThatPirateGuy in reply to MFarmer says:

                And that is where you are clearly wrong.Report

              • Avatar MFarmer in reply to MFarmer says:

                No, I’m right about this one. It’s a mandate, and it’s unconstitutional. You know it — you just don’t want to admit it. One day you are going to look back on this and say — “What was I thinking?”

                If the mandate is judged to be constitutional, it’s all over, and you don’t want that do you? Don’t you want to be economically free and prosperous? Good God, man, get a grip.Report

              • Avatar ThatPirateGuy in reply to MFarmer says:

                It is all over?

                What happens? do vengeful angels come down and slaughter us all? Zombies? Nazi’s with scottish fold kittens for all collaborators?

                One of us needs to get a grip and look at reality for sure. I’m not so sure it is me.Report

              • Avatar Scott in reply to ThatPirateGuy says:

                TPG:

                “They charge me higher taxes for declining to raise children.”

                No the gov’t does not. If you voluntarily choose not to have children then you choose not to get the benefit of the deduction (or call it a rebate). No one forces you to do anything.Report

              • Avatar ThatPirateGuy in reply to Scott says:

                If you voluntarily choose not to get health insurance you give the irs more money.

                No one forces you to do anything.Report

              • Avatar Jason Kuznicki in reply to Scott says:

                If you voluntarily choose not to get health insurance you give the irs more money.

                No one forces you to do anything.

                I’m sorry, that doesn’t even pass the giggle test.Report

              • Avatar ThatPirateGuy in reply to Scott says:

                I guess some people are excessively ticklish.Report

  3. Avatar Aaron W says:

    From Wikipedia:

    “Impose an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who do not secure insurance; this will rise to $695, or 2.5% of income, by 2016. This is an individual limit; families have a limit of $2,085.”

    I dunno. Is this really compulsion? It sounds more like a nudge. Either way, I still think it would have been less controversial to change the individual mandate into a timing requirement. That is, if you’re uninsured, you can only buy coverage at a certain time of the year (say, January and July) to prevent people from gaming the system. This seems like it would be consistent with Constitutional principles, and give less pause to people like you. I believe this is how they have constructed their healthcare system in Switzerland, so it’s not like this is a new idea. Why did the Democrats go with the individual mandate instead, even knowing about these issues? Probably has something to do with gaming the CBO score.Report

    • Avatar trumwill in reply to Aaron W says:

      This seems like it would be consistent with Constitutional principles, and give less pause to people like you. I believe this is how they have constructed their healthcare system in Switzerland, so it’s not like this is a new idea.

      It’s what American insurance companies do now with regard to family members on group plans. I agree that this might be a better way to go. Somewhere I have a write-up on what I would have done in lieu of the mandate. I’ll see if I can find it.Report

      • Avatar E.D. Kain in reply to trumwill says:

        I agree this makes some sense excerpt who pays for a catastrophe? We really just need universal catastrophic coverage.Report

        • Avatar trumwill in reply to E.D. Kain says:

          Who pays for catastrophic coverage for those that decide to pay the penalty? There’s only so much you can do without automatic enrollment and taking it straight out of our paycheck. I agree that having universal catastrophic coverage would be a giant step forward.

          There is a logistical/political problem with it, though: when do you give up and deny treatment to a lost cause? People get upset when insurance companies do this, but when the government does it they are more likely to want laws passed guaranteeing more coverage. The Canadians have a degree of maturity that I think we often lack when it comes to these things. I’m not sure what the answer to this is.Report

          • Avatar Jaybird in reply to trumwill says:

            I’m not sure what the answer to this is.

            This answer sounds like it’s likely to be one of my quickly fired-off snarky answers but I assure you, I am dead serious.

            Drug legalization.Report

            • Avatar trumwill in reply to Jaybird says:

              Ok, you have piqued my interest. Elaborate.Report

              • Avatar Jaybird in reply to trumwill says:

                We have a schizophrenic attitude toward pain management in this country. People are writhing in pain in their last days with doctors fearing giving them too much morphine because of addiction concerns.

                ADDICTION CONCERNS.

                If managing one’s pain is not an option, you’re pretty much stuck with access to a cure as your only hope.

                I suspect that pain management that doesn’t worry about whether someone might enjoy being medicated would result in a great deal more people being “at ease” with the natural course of events, not only for themselves but for loved ones.Report

              • Avatar 62across in reply to Jaybird says:

                Excellent comment.Report

            • Avatar ThatPirateGuy in reply to Jaybird says:

              You know I’d cast the deciding vote to kill the ACA, end social security and end medicare if it was attached to that bill.Report

        • Avatar Sam MacDonald in reply to E.D. Kain says:

          Who pays for catastrophic gambling losses?Report

    • Avatar trumwill in reply to Aaron W says:

      The Trumwill Plan would go as follows:

      (1) In the event that you are uninsured and applying for insurance, PECs are not covered for the length of time that you were uninsured for a period not to exceed one year. (I am flexible on this. Six or nine months pay be better. If someone has been uninsured for 3/4/5 years or more, I could be convinced that 18 months may be more appropriate.)

      (2) There are no guaranteed rates except during or after coverage through a specified enrollment period. If you decide to insure yourself during non-OEPs, you can purchase stop-gap insurance according to your risk category. Time spent on stop-gap insurance counts towards the one year of no-PEC coverage.

      (3) Switching between insurance companies or plans must occur during the OEP, or else you are liable for higher rates according to your risk category until the next OEP.

      (4) Rescission is possible during the stop-gap phase, but only if (a) the missing information is immediately pertinent to claims filed and/or (b) outright fraud has occurred. After the OEP, rescission is not possible.

      This would (a) disincentivize foregoing insurance until you need it, (b) allow people to get insurance at any point during the year, (c) put an end to the practice of shutting out those with PECs. I’m flexible on the specifics. Maybe one year should be nine months or six, for example. Maybe PEC coverage should automatically begin after the OEP or there be some combination (six months minimum or the OEP, whichever occurs later – or something like that).Report

      • Avatar t e whalen in reply to trumwill says:

        Okay, you’ve for the most part described Title I of HIPAA, which was enacted in 1996 and didn’t solve much.Report

        • Avatar trumwill in reply to t e whalen says:

          That applies to group coverage. It solved a lot of problems there. What I am looking at is porting it over to individual plans, which is where the current PEC problems lie.Report

          • Avatar trumwill in reply to trumwill says:

            I should say, refitting it to suit individual coverage rather than porting it over. There are some differences between the two. But by and large, with the exception of the length of PEC non-coverage (which I shorten for people who have only been uninsured for a short period of time), most of the problems regarding PECs and barriers to coverage exist in the individual market.Report

  4. Avatar Adam says:

    With respect to the issue of general expansion of government and your “primordial” uncomfortably with the mandate why is it so important the level of government that implements it? Does the Massachusetts mandate make you similarly uncomfortable?
    Why is permitting individuals a choice of private companies worse than forcing everyone into a single government run program like Medicare?Report

    • Avatar Will in reply to Adam says:

      I’m not really that offended by the Massachusetts plan, largely because states have traditionally been accorded far broader powers than the federal government. As a general rule, I also find expansive regulations at the local and state level more tolerable because I think state and local officials are more democratically accountable than their federal counterparts.Report

  5. Avatar James K says:

    Constitutionality aside, the mandate suggests a real failing in the policy development process. It’s like the policy developers just said “well if everyone bought insurance there’d be no problem, so let’s just make them”. This is precisely what Adam Smith was warning about when he criticised “the man of system”.Report

    • Avatar Chris in reply to James K says:

      It’s important to remember that the mandate originally accompanied the public option. This made it seem like a less awful policy. Without the public option, it’s really just a way of giving insurance companies more business.Report

      • Avatar RTod in reply to Chris says:

        “it’s really just a way of giving insurance companies more business.”

        Um, no. Insurance companies simply pay for the cost of healthcare and add 3-4 points for administrative expenses and profit margin. Adding premium for someone who doesn’t use healthcare – while growing the pie – is meant to reduce the premium cost per insured by making the healthy assist in subsidizing the users.

        A good idea it might or might not be, but it’s not a strategy to feed insurers.Report

        • Avatar Chris in reply to RTod says:

          Um, yes. It will increase the overall customer base of insurance companies by millions, literally. This is why insurance companies actually pushed for it. It may have other benefits/purposes, but this is undeniable.Report

  6. Avatar Simon K says:

    Do I like the mandate? No, I do not. Here’s the thing, though – there is a real problem. Or rather, there are a number of closely interconnected real problems – high healthcare costs, medical bankruptcies, poor health outcomes – connected to uninsured and underinsured people. One solution to those problems is to force insurers to cover everyone for everything. The tradeoff you have to make if you pursue that solution is that everyone has to buy insurance. So is the mandate a price worth paying if that works? It would be, yes. Will it be in reality? Who knows – the ACA as it stands is badly compromised, but there is some chance of it working.

    I would have preferred a different solution. In fact I would prefer single payer, mandatory subsidised health savings accounts with catastrophic insurance or Wyden Bennet. But this is politics, and we got the most reasonable thing that could be passed.Report

    • Avatar Michael Drew in reply to Simon K says:

      “we got the most reasonable thing that could be passed.”

      I don’t think we can go that far. We got the thing that they chose to pursue, largely because they could get insurers on board and not try to kill it (too hard). But we don’t know that something more reasonable couldn’t.

      What we do know is that this is something that could be passed, it is a fairly fundamental reform as compared to most alternatives on offer (other than Wyden-Bennett), and I agree with you that it has a fighting chance to address some of these issues. And what’s more we can change it if it sucks. But for now I think these facts about it recommend it pretty well on their own.

      We’ll never know what things could improve the status quo until we try to do some of them (I realize that is the perfect distillation of the dreaded liberal tinkerer, but it’s the case), and in an environment in which effecting change is extremely difficult once inertia has set in, any movement from a bad status quo has some inherent value to it, if only inasmuch as it brings about a less entrenched new status quo that people will have less vested interest in, be less adapted to, and therefore more willing to change yet again. This is why I have argued from the beginning that even if you hate this reform, unless you really don’t hate the status quo, you have some reason to support it (maybe not enough to get you all the way there, but some). It could be the first step toward an outcome that is much more acceptable to you, though that will depend much on your personal commitment to making that happen. There is a reason the president welcomes ideas about how to change the law, but not attempts to undo it entirely.Report

      • Avatar Simon K in reply to Michael Drew says:

        Okay, I don’t know for sure that this was the most reasonable thing that could have been passed. I’ll defer to people who understand the legislative process better than I do on that one – the alternatives certainly seemed to have higher obstacles to overcome.Report

    • Avatar Pat Cahalan in reply to Simon K says:

      > One solution to those problems is to force insurers to
      > cover everyone for everything. The tradeoff you have
      > to make if you pursue that solution is that everyone
      > has to buy insurance.

      This assumes facts not in evidence.

      Aside from the fact that we don’t have to partake of this particular solution, we could still force insurance companies to have a reasonable default policy that was available to everyone. It doesn’t need to cover everything.

      And we don’t, necessarily, need to force everyone to get it. We just need to make it so that if you don’t have insurance, and you do opt-in, you have to pay the vig.

      There’s lots of mechanisms to do that.Report

      • Avatar Simon K in reply to Pat Cahalan says:

        If you force insurers not to discriminate against people with pre-existing conditions, you are forcing them to take a loss. This is what the other components of Title I of the ACA do. So you have to do something, or health insurers will go out of business. You could, I suppose, subsidise them directly, but that’s going to be about as popular as bailing out AIG every year for the foreseeable future. Except AIG never killed your grandmother. What mechanism other than a mandate would work?Report

        • Avatar Michael Drew in reply to Simon K says:

          For all the reasons you pointed out in your good comment previously, people have been incentivized to buy insurance that they don;t strictly need, already. So there are a number of healthy people already apying in to the system. i don;t think we know to a certainty that ending PEC discrimination without a mandate puts insurance out of business. That’s why I agree with Boonton that it would be interesting to run the experiment, and why I regret the lack of a severability clause – it would make judges think twice about invalidating the mandate. But it seems Judge Vinson took it in his own hands to take that issue off the table (though obviously SCOTUS will have to wrestle with it one way or the other anyway).

          But you raise an interesting question about what happens if we do drive insurance companies into the red. Are we really so sure that subsidizing them would be so unpopular or unwise? After all that would essentially turn them into private non-profit regulated utilities, which is basically the system that I believe it’s Germany has that health insurance wonks tend to drool over. Not single-payer. Not even public. Just efficient.Report

          • Avatar Simon K in reply to Michael Drew says:

            You’re right that it would be an interesting experiment. The way American firms tend to respond to regulation doesn’t make me very optimistic about the consequences, but its true that one possible outcome is public subsidy to insurers – I just worry about what they’d then do. I see an ever-growing spiral of regulation as insurers tried to evade their responsibilites and take the money anyway and congress tried to get them under control.

            One precedent is Switzerland, which has essentially the system the ACA will eventually introduce in the US. Their insurers ultimately got together and turned themselves into non-profits, in spite of the mandate.Report

            • Avatar Mad Rocket Scientist in reply to Simon K says:

              Personally, I think it would be best if health insurers were non-profit (so much so that I won’t use a for-profit company if I can avoid it).Report

              • I agree, though a large number of them are. And even non-profits have bills to pay and costs to contain.Report

              • Avatar E.D. Kain in reply to trumwill says:

                A little government rebalancing could take care of that.Report

              • Avatar Simon K in reply to trumwill says:

                But they do do better, it seems. Or at least Kaiser seems to.Report

              • Avatar trumwill in reply to Simon K says:

                Kaiser is an interesting case with their having their own staff of doctors. There was a time when it seemed like that was going to be the future, but it didn’t seem to come to pass.Report

              • Avatar Simon K in reply to trumwill says:

                Yes, and I’m not sure why. It has considerable advantages for Kaiser and the patients. I get the impression maybe the doctors don’t like it very much.Report

              • Avatar trumwill in reply to trumwill says:

                It’s never really come up with Dr. Wife or any of her colleagues, so I don’t know. There has been a lot more consolidation among providers, though, with more and more (like my wife) working for a hospital on salary rather than as an independent business. If docs were the reason, maybe there will be a renaissance.

                I figured that one reason it never caught on was that it cut into the all-important “choose your own doctor,” but I can’t say that I have any idea what restrictions Kaiser puts on seeing outside doctors.Report

              • Avatar Simon K in reply to trumwill says:

                Its the same as any other HMO – you can go out of network or to a non-primary physician if its urgent. I’ve never really understood the “choose your doctor” thing, but then as I said elsewhere, I grew up in a very different healthcare system.

                Its interesting that more doctors are on salaries. If anything that should be a good sign.Report

              • Avatar trumwill in reply to trumwill says:

                Honestly, I’ve never been all that attached to any of my doctors, but I think it’s a perk that a whole lot of people are used to. I remember during the 90’s that was a real constant theme. Then HMOs started offering PPOs and it died down a little bit. I suspect it mostly comes down to what you’re used to.

                Here’s an interesting tidbit from the WSJ:

                Some 65% of doctors who changed jobs in 2009 moved into a hospital-owned practice, while 49% of doctors out of residency were hired by hospitals, according to the Medical Group Management Association. In its 2010 census, the American College of Cardiology reports that nearly 40% of private cardiology groups are currently integrating with hospitals or merging with other practices.Report

              • Avatar Simon K in reply to trumwill says:

                Yeah, although people must be really attached to it. The out of pocket cost difference between a good HMO plan and the equivalently priced PPO plan is huge, even if the PPO user never actually goes out of network. We offer both, both at the same cost, and most of my colleagues take the PPO. In my view they must really love their doctors.Report

        • Avatar Pat Cahalan in reply to Simon K says:

          > If you force insurers not to discriminate against
          > people with pre-existing conditions, you are
          > forcing them to take a loss.

          No I’m not. There’s lots of ways to amortize that loss, including giving a lot of it back to the dummy who didn’t have insurance until they needed it. Again, there’s lots of ways around this.

          Look, insurance actuaries are some of the most mathematically dependable folk in the universe, all right? They make economic forecasters look like morons. Hell, they make *rocket scientists* look like “just decent” mathematicians.

          Taken across a large population, with a fairly predictable life expectancy, they do one hell of a bang-up job. Insurance companies can’t predict when *you’re* going to die, but they can predict within a remarkably accurate model what their costs are going to be, for their population of clients. They might not know when Joe is going to die, but they know that they’ll have X fatalities within their 33-35 year old male subscribers this year.

          So here’s just one alternative. Insurance companies are required to provide lifetime service options. Service packages can still vary, duration doesn’t.

          The cost of that option is variable based upon date of acceptance. So if I hook myself up with insurance at age 1, I’m going to pay $N a year, every year, for the rest of my life. If I hook up myself with insurance at age 25, I’m going to pay $N + $M a year, every year, for the rest of my life. If I hook myself up with insurance at age 60, I’m going to pay $N + $Q a year, every year, for the rest of my life.

          If I want to change my coverage from plan A (maybe only catastrophic coverage) to plan B (more comprehensive coverage), they can charge me the rate that I would normally pay, plus the pro-rated difference for the years I didn’t have that coverage. “Wait!”, you say, “That means I’m paying for service I didn’t get for the years I didn’t have plan B!”

          Yes, that’s right.

          Yes, if you never have to go to the hospital (not very likely), you will be paying for something you never use. That’s what insurance is all about.

          Yes, if you have *no* insurance and you get a catastrophic incident, the insurance company is going to take a substantial portion of your income for the rest of your life. Beats being a meat Popsicle, right?

          There are lots of other potential models. Most of the ones that work without a mandate involve highly rewarding people for getting good, comprehensive coverage very early and keeping it for their lifespan, and very heavily transferring free rider cost back onto the free rider population when they opt-in.

          For most non-free riding people, they will pay into such a system much more than they will ever take out, but their payments will be very small and almost cosmetic compared to what they pay now. Some of this goes to subsidize the free-riding population, but the burden of that is amortized across a very large population of active participants.

          For most free-riding people, they will wind up paying heavily to subsidize the remainder of the free-riding burden.

          Give it ten to fifteen years at most. Everybody will get insurance at birth, because everyone will know somebody who pays $15 a month for life and always has, and somebody else who pays $1000 a month for being a jackass and running around without insurance until they lost their leg in a motorcycle accident.Report

    • Avatar RTod in reply to Simon K says:

      “One solution to those problems is to force insurers to cover everyone for everything. The tradeoff you have to make if you pursue that solution is that everyone has to buy insurance.”

      The first sentence is the problem here – you can’t insure for everything… hence the talks of “death panels.” If you are simply asking all to buy insurance to fund insuring everything, then ou haven’t fixed the underlying problems – you’ve only pushed back the clock for Daylight Savings. Initially price per insured will indeed go down, but at the rate of growth in cost we’ll be in the same situation we are now in a few years.Report

  7. Avatar Adam says:

    @James K
    Given the fairly lengthy history of the mandate in both the US and Europe (see the Netherlands and Switzerland) I don’t see how you can characterize it as a “failing in the policy development process.” It’s a tried and tested policy.Report

    • Avatar James K in reply to Adam says:

      Tried and tested doesn’t mean its good policy, it just means its not so bad that it causes the whole nation to collapse. Besides which I’m not suggesting mandates are necessarily a bad idea in all cases, merely that imposing one won’t sole the US’s health care problem.

      The problem the mandate is trying to solve is that without it community rating and guaranteed issue will make the insurance market unviable. Rather than take the hint that community rating and guaranteed issue are a really bad idea, they decided to paper over the cracks by forcing healthy 20-year olds to pay far more for health insurance than it is worth to them.

      The solution is to stop treating insurance like it was welfare. Insurance is a risk management tool, designed to accommodate risk-averse people who can afford the expected cost of a future event, but are worried about unlikely but highly adverse outcomes like your house burning down, or you getting cancer. If you can’t afford the expected cost of those events then your insurance will be too expensive to afford and that’s because insurance is not a subsidy.

      Freddie is entirely correct that markets won’t help produce certain distributional outcomes, that’s not what they’re for. But the solution is not to torture health insurance into the monstrosity that it has become in the US, but to use welfare. Because that’s what you do when people can’t afford somethign essential, you give them welfare. Or you don’t, that’s a political decision. But to try and turn insurance into a welfare system is the height of stupidity. And to try and paper over that stupidity with a mandate just piles one absurdity on top of another.Report

      • Avatar Simon K in reply to James K says:

        But health insurance in the US isn’t insurance. Hasn’t been for at least 20 years. Its a kind of massively subsidized and scrupulously unfair redistributive savings plan. Like social security only privatized and even less fair. Thinking about is as insurance just confuses the issue. Guaranteed issue, community rating and the mandate just eliminate the final pseudo-insurance-like elements from the scheme and thereby make the redistribution at least somewhat fairer. Yes, it is possible to do better in theory. However, given the delusional fever dreams that pass for political ideology round here, possibly not in reality.Report

        • Avatar James K in reply to Simon K says:

          If I’m going to limit my policy advice to what I think politician would be willing to do, I might as well just shoot myself now 🙂

          My whole point is that this is a stupid policy, designed to correct for previous stupid policies. The fact that this is also true of most enacted policy is irrelevant. After all I’m trying to change the political reality, in what miniscule way I can.Report

  8. Avatar ThatPirateGuy says:

    Please listen to Charles Reid, former solictor general for Ronald Reagan.

    http://www.talkingpointsmemo.com/documents/2011/02/reagans-solicitor-general-testifies-that-obamacare-is-constitutional.php?page=2

    This will give you something to consider.Report

  9. Avatar Will H. says:

    I have to wonder why the framers of the Constitution never wrote about a right to health care.

    For all the fixation on the Canadian system, I haven’t heard many people extolling the Mexican system. It works great.
    Pharmacists can write a prescription for many common maladies, so there’s a reduction in costs there. Yerberias all around like they were Walgreen’s or something. All dirt cheap.Report

  10. Avatar John Howard Griffin says:

    The Militia Act of 1792, signed by none other than George Washington, mandated that all able bodied men purchase a gun.

    That every citizen, so enrolled and notified, shall, within six months thereafter, provide himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch, with a box therein, to contain not less than twenty four cartridges, suited to the bore of his musket or firelock, each cartridge to contain a proper quantity of powder and ball; or with a good rifle, knapsack, shot-pouch, and powder-horn, twenty balls suited to the bore of his rifle, and a quarter of a pound of powder…

    Without any subsidy for those who couldn’t afford to buy one.Report

  11. Avatar Jaybird says:

    Will, I suspect that, as you grow older, the government’s assumed power will freak you out more and more.

    Another thing to watch out for: you’ll say something like “the promises never delivered, the benefits never materialized” and people will respond with some variant of “YET!” or “that’s because it was sabotaged by the opposition” or “it wasn’t sufficiently funded”. Or, if they don’t consider you a friend, they’ll speculate about why you’re pointing such things out.

    Keep watching.Report

  12. Avatar Boonton says:

    The problem with the discussion about the mandate is the uncomfortable fact that there is no actual mandate in the law.Report

  13. Avatar Hyena says:

    What wisdom? There’s politics, there’s gut feelings, but there’s no “wisdom”. It’s healthcare, not a father-son moment.Report

  14. Avatar Robert Cheeks says:

    Great post Will, to bad it’s lost on the herd. We rally on the barricades!Report

  15. Avatar Aaron W says:

    I was just thinking… how is the insurance mandate any different from the mortgage interest deduction in the tax code? The mandate taxes people who do not purchase health insurance. The mortgage interest deduction taxes people who do not have a mortgage because they purchase homes with cash, rent, or have already paid their mortgage. Now, if you’re going to suggest that the mortgage interest deduction is unconstitutional for the same reasons, I’m all for it, because I don’t think subsidizing people making reckless decades-long bets on the local labor market is very wise.Report

    • Avatar trumwill in reply to Aaron W says:

      For me personally, if the mandate had been expressed as a tax, I would be defending it wholeheartedly. In fact, prior to its boosters’ insistence that it was not a tax, I did defend it (for more, google: trumwill hitcoffee mandate). But in the law they called it something else and in public comments by those that made the bill into law, they vehemently objected to the notion that it was a tax.

      From my perspective, it ultimately doesn’t matter. It’s close enough to a tax that it should probably count. I think that is ultimately what will be determined. But it’s not a slam-dunk issue.Report

      • Avatar Boonton in reply to trumwill says:

        OK let’s say you’re free to rewrite the law to ‘express’ the mandate as a tax. What specifically do you change? Do you drop criminal penalties for not complying with the mandate? Nope, the law already specifically says the IRS can’t go after anyone criminally. What specifically makes the mandate not a tax except the shorthand pundits and analysts use in talking about the bill?Report

        • Avatar trumwill in reply to Boonton says:

          Put the words “tax” and “deduction” in the bill itself, perhaps, rather than using the word “penalty.” Functionally, it’s pretty close to a typical tax. I say “pretty close” because there are a few differences (a minimum and a deduction based on either the minimum or a percentage of your income rather than being a flat deduction or based on an expenditure) that make it a little unlike most taxes I am aware of.

          Ultimately, I don’t buy it. I think it is a tax. But, again, I don’t consider it to be a slam-dunk issue {shrug}.

          Incidentally, it’s interesting that when the Republicans talked about how they want every law to cite the Constitutional authority under which the law is passed, I thought they were grandstanding. Well, I still think they are. But it would have been helpful in this case.Report

          • Avatar Boonton in reply to trumwill says:

            I don’t think it would have been very helpful since courts are not limited to such citations. A law may be justified under serveral different clauses, just because Congress cites the wrong one doesn’t mean the law itself is unconstitutional or that Congress has to go back and ‘rewrite’ the laws authority like a kid who got his homework wrong and has a stern teacher who makes him redo it.Report

    • Avatar Scott in reply to Aaron W says:

      Aaron:

      The gov’t is free to give deductions bases on its power to raise revenues but not free to make you buy something. How easy is that? That mandate doesn’t tax, as it is not designed to raise revenue, it penalizes, just b/c the penalty is collected by the IRS doesn’t make it a tax.Report

      • Avatar Boonton in reply to Scott says:

        1. Not designed to raise revenue? The IRS collects it, it goes into the Treasury. That’s raising revenue.

        2. Game over, once you say the gov’t is free to give deductions you can’t specify a real difference between this ‘mandate’ and tax deductions. How do I get a tax deduction for solar panels without buying them? How do I get a mortgage interest or first time homebuyer deduction without buying a home? Or a credit for a super-efficient car without buying one? If you read this bill as an impermissable mandate to buy insurance then how do you not read the tax code as an impermissable mandate to have children, buy homes, buy solar panels, electric cars, donate to churches and charities etc.? The only difference you have is perception. Pundits talk about the ‘individual mandate’ in the health care bill but don’t talk about a ‘have babies’ mandate in the tax code…even though the cost imposed on the childless in the tax code is a lot more than the health bill.Report

        • Avatar MadRocketScientist in reply to Boonton says:

          My understanding is that the language of the bill is what is important. If the ‘mandate’ had been written down as an across-the-board tax hike with a deduction or credit for those who carry private insurance, this would be a non-issue. It’s because the language of the bill (AFAIK) dictates that people buy a product from a private company or pay a penalty that makes it bad.Report

          • You might be surprised that ‘mandate’ is not actually in the language of the bill (at least in the section regarding what we call the ‘individual mandate’).

            An across the board tax hike wouldn’t resolve the issue that the anti-mandatites are expressing here. Look imagine Congress grants a $2,000 tax credit for having a kid. The fact is you can argue that could have been a $1500 tax cut for everyone rather than a $2K cut for those who have kids. By the reasoning here, that would still be a ‘mandate to have kids’. Except it’s not and no one seriously thinks it is.

            Suppose you already had a $2K tax cut for having a kid and congress expanded that to a $2500 tax cut. Again same thing, I don’t have a kid and you do but otherwise we are exactly the same. I pay $500 for not having a kid therefore I’m a victim of a ‘have a kid mandate’.

            Either way you work it, you can’t consistently claim that the ‘individual mandate’ isn’t a tax and must be struck down without also striking down almost every piece of ‘social engineering’ in the tax code.Report

    • Avatar E.D. Kain in reply to Aaron W says:

      Great point, Aaron. I think yore right on the money.Report

  16. Avatar Herb says:

    Not a big fan of the mandate myself, mostly because I’m not sure it will work, but if I don’t find the constitutional arguments borderline ridiculous, I find them outright, obviously ridiculous.Report

  17. Avatar BSK says:

    Doesn’t it all come down to how we define “mandate” and “tax” and “penalty”? For instance, I could argue that my inability to deduct any portion of my rent payment from my tax bills is a “penalty” for not owning a home (where a percentage of the mortgage is tax deductible). I could then argue that home ownership is mandated and I am being fined for not participating. It is not the best argument in the world, but I think it points out how the government gives all kinds of financial incentives or disincentives for behaviors or activities it finds either good or bad. This is problematic for a variety of reasons, but there is no denying that it is how things are done. I think the law put forth was poor in how it framed this whole situation… if I was them, I would have simply raised everyone’s taxes by whatever the “penalty” is and then offered a tax deduction equal to that for everyone with insurance. You accomplish the same thing, but without a mandate.

    And that gets to the heart of the matter… are we objecting to the government using financial incentives? Or the language and methodology around this current incentive (or, really, disincentive)? If it is the former, than we should probably attack much larger situations than the health care mandate; from what I understand, the penalty or whatever it is will be quite minute. If it is the latter, than we must examine why we are so acutely bothered when this is already going on, just under a different name. And where we will be left if the government does what I just suggested and do the same thing the way they always have.

    FWIW, I am in favor (as I’ve stated elsewhere) of major health care reform, but never once supported a mandate. And I oppose most of the tax deductions that are given for supposedly “desired” behavior.Report

    • Avatar Boonton in reply to BSK says:

      And that gets to the heart of the matter… are we objecting to the government using financial incentives? Or the language and methodology around this current incentive (or, really, disincentive)?

      The heart of the matter is that the people pushing this do not feel liberty is at stake. IMO they compare unfavorably to Birthers. Bithers, who don’t believe Obama is a ‘natural born citizen’ are wrong in fact but right in principle. The Constitution does seem to restrict the office to ‘natural born citizens’, their problem is not reading the Constitution honestly but evaluating facts honestly. The argument here though is a lot more like those people who get a candidate kicked off the ballot because his petition was supposed to be submitted on double sided paper instead of single sided. Even if they technically have the law on their side it’s hard to feel like they are doing a great service for democracy.

      At the end of the day the fact remains that even if everything said here by the anti-mandatites is 100% true the fact remains that a refundable tax credit for buying your own insurance would effectively be the same policy. A major law that was built on debate and real compromise is trying to be repealed not by the results of an election but by playing what are essentially laywer games.Report

      • Avatar BSK in reply to Boonton says:

        Boonton-

        I agree with you. I suppose when I said what the Democrats SHOULD have done, what I meant was what they should have done if they indeed wanted to promote the having of health care (or penalize the lack of healthcare) without running afoul of the law. I am against the mandate for a variety of reasons. And am against promoting so called “desired behaviors” through the tax code. My larger point was that I don’t know if the mandate is really doing anything that isn’t already being done, just dressed up in different clothing. If we really are upset about the government giving or taking money to the people that act the way it wants, there are probably bigger fish to fry than this current matter.Report

  18. Avatar BSK says:

    I see Aaron has already said what I just said. I should read the comments first, probably. At least I’m not alone in my thinking!Report

    • Avatar tom van dyke in reply to BSK says:

      Yes, one can win any point by blurring all distinctions. X = Y, I win!Report

      • Avatar BSK in reply to tom van dyke says:

        TVD-

        I’m not arguing that its right, only that their isn’t any real difference between the mandate penalty and other forms of taxes and tax breaks. So, the government, with some better wording and management, could accomplish the exact same thing.

        If you ask me, most of these tax breaks are wrongheaded and should be eliminated.Report

        • Avatar tom van dyke in reply to BSK says:

          I hear you, BSK—tax laws as an instrument of social policy should make libertarians especially nauseous.

          My best understanding is that the Dems, in forcing the health care thing through, couldn’t get the “whole loaf” that would have made the bill less vulnerable to legal challenge.

          One problem in making it a “tax” was that all revenue-raising bills must originate in the House, per the Constitution. But it was the Senate bill that passed and was signed by the president. [As you recall, the maneuvering in Congress was a very close thing, and would not have survived a proper restart.]

          But the point I’m making here is that nobody’s required by law to buy a house, or take the deduction for that matter. This goes back to Jason’s original point about action and inaction.

          That said, I’m not too involved with all this. Seems like Anthony Kennedy will decide; some say he is at root a libertarian, and might surprise.

          There’s also the other scenario where it’s Vinson’s decision that they take up, and Elena Kagan will have to recuse; a 4-4 vote will leave the Vinson decision standing.

          But on the whole, I admit skepticism that in the end, principle will have much to do with the outcome. The case is more interesting to me as a limning of the issues, and perhaps a reexamination of Founding principles re enumerated powers vs. limitless ones.Report

          • Avatar Boonton in reply to tom van dyke says:

            One problem in making it a “tax” was that all revenue-raising bills must originate in the House, per the Constitution. But it was the Senate bill that passed and was signed by the president.

            Problem: The bill also raises the tax cap on earnings subject to Medicare’s payroll tax and I haven’t heard anyone argue against it on the grounds that it didn’t originate in the House. If killing the bill in the courts was that easy you’d think it would have been raised by now.

            But the point I’m making here is that nobody’s required by law to buy a house, or take the deduction for that matter. This goes back to Jason’s original point about action and inaction.

            But here’s the problem. There’s nothing in the law that says you have to buy health insurance. If you don’t buy health insurance you pay a penalty just as there’s a penalty for not having a kid, not buying a house, not making various donations to charity etc. etc. If you want to reimagine Constitutional law to void all social engineering aspects of the tax code then go ahead and advocate that. If you aren’t, though, you’re just changing the rules to kill on particular bill. In other words what is being advocated is 100% pure judicial activism.

            The only reason we are talking about the Constitutionality of an ‘individual mandate’ is because pundits refer to the tax penalty in the bill as a mandate. Technically, though, there’s no reason why you couldn’t refer to the tax codes benefits for having kids as a ‘mandate to have babies’. Now it’s not that pundits are being dishonest, it’s that when you are talking about whether or no something is a good policy you care about substance. But law cares a lot about form. A true mandate to, say, ‘have babies’ would be a very scary thing for a gov’t to enact. But in terms of policy discussion people tend to gloss over the fact that there’s a difference between a ‘mandate’ to have babies and a policy that increases the costs of not having babes. In form they are not the same thing at all.Report

          • Avatar Robert Cheeks in reply to tom van dyke says:

            exellent analysis Tom!Report

            • Thx, Bob.

              Mr. Boonton: A de facto “penalty” is not the same as a de jure penalty. “Tantamount” isn’t the same thing as “is.” Neither is your failure to qualify for the Earned Income Credit because you make too much money a penalty, although we might call it a “penalty.”

              As far as the “originating in the House” bit, I’m just passing on an argument I’ve read elsewhere but not here. It may or may not turn out to be significant.Report

  19. Avatar MFarmer says:

    Good lord, free enterprise doesn’t have a chance with all these planners and fixers. It’s frightening, really. In comparison, Rube Goldberg was a minimalist.Report

  20. Avatar Boonton says:

    I believe the actual text of the ‘individual mandate’ can be found here around page 325 http://docs.house.gov/rules/hr4872/111_hr3590_engrossed.pdf

    Several quick observations:

    1. A longish preamble/discussion in the bill talks justifies it based on the interestate commerce clause. How important that is I’m not really sure.

    2. The term mandate does not seem to be present, it’s in a section called ‘individual responsibility’.

    In terms of it being a tax, the following strike me on a fast reading:

    1. The term used is ‘penalty’ rather than fine. As I’ve pointed out the word ‘penalty’ often appears in terms of taxes (i.e. a ‘penalty’ for filing late, for taking money out of your IRA too soon etc.) As has also been pointed out the IRS & gov’t is specifically prohibited form using it’s law enforcement powers to collect this thing if it is really a fine rather than a tax.

    2. The individual reports this on their Income Tax Return. An odd place to report something that isn’t really a tax.

    3. Perhaps most damming of all (see page 329), individuals are exempt from the penalty if they ‘cannot afford coverage’. How do you know if you ‘cannot afford coverage’? It’s based on whether the cost of coverage would exceed 8% of your adjusted gross income. In other words this penalty impacts you if your income goes higher but doesn’t if your income goes lower or disappears. In other words it’s a damm INCOME TAX. Note that most actual criminal penalties are not income dependent. When we hear of the fine for passing a bad check or speeding we don’t think the fine depends upon our income but this penalty does. Now granted it’s unlike the regular income tax in that it’s a flat amount as opposed to a % of our income, but nothing in the Constitution says income taxes must be based on a percentage of income rather than being flat amounts.

    So now the problem with this thread is that there’s no real mandate. We can talk about a mandate but legally there’s no real mandate there. You are perfectly free to decline coverage and pay the tax (aka penalty). Doing so is not illegal. Without a mandate you’re back to an income tax and when you go back to the income tax you’re kinda stuck here when it comes to this court nonsense. You are either advocating a very radical reading of the Constitution which would have to undo all ‘social policy’ based tax deductions and credits or you’re advocating pure judicial activism.Report

    • Avatar Trumwill in reply to Boonton says:

      Thank you for providing the link to the document and pointing to the applicable section. I am now officially sold.Report

      • Avatar tom van dyke in reply to Trumwill says:

        A penalty is assessed for failing to comply with the legal obligation to buy health insurance [from a private party, mind you]. The word “mandate” is not necessary for the concept to hold. Neither is the euphemism “personal responsibility” separable from the concept of “legal obligation.” Words, words, words.

        Had they been able to write the law without the penalty, that everyone except the non-complier gets a tax break, no prob. But that would have defeated the whole purpose, to compel the young and presumably healthy to subsidize the private risk pool.

        Had it been a public risk pool like Medicare, SS, etc., smoother sailing. But the lack of a “public option” was precisely why the bill managed to squeak through in the first place.Report

        • Avatar Trumwill in reply to tom van dyke says:

          Whether it is phrased as a penalty for not getting health insurance or a break for for not getting it is not particularly relevant, as far as I am concerned. The key component to me was whether it was meant to be an alteration of the tax code or merely a fine collected by the IRS. The language in the law pretty clearly reads to me as the former.

          Now, if critics want to sue on the basis that it did not originate in the House, they might have a point. But, at the moment, that is not what they are arguing. If they raise that argument, I’ll take a look.Report

        • Avatar Boonton in reply to tom van dyke says:

          tom

          A penalty is assessed for failing to comply with the legal obligation to buy health insurance [from a private party, mind you]. The word “mandate” is not necessary for the concept to hold.

          OK previously I had someone say to me that “individual mandate” was the operative phrase that made the bill illegal. For the record, that phrase exists only in the minds of pundits who talk about the bill, not the bill itself.

          Next, is there a ‘legal obligation’ to buy insurance in this bill? As I pointed out when you usually hear the world penalty is relates to taxes but is usually something you can legally do. For example, there’s a penalty for early withdrawl of your 401K but it’s something you can legally do. In this bill if I went to a lawyer or CPA and told him I didn’t want to buy insurance but had plenty of money could he tell me “ok just pay the penalty”? If so it’s not really a mandate because such professionals are ethically obligated not to advise their clients to break the law.

          Had they been able to write the law without the penalty, that everyone except the non-complier gets a tax break, no prob. But that would have defeated the whole purpose, to compel the young and presumably healthy to subsidize the private risk pool.

          So this isn’t about any principle really here but a rather semantic argument over form. You’re saying Congress can pass a $750 penalty on all taxpayers coupled with a $750 credit for all who have coverage or who have a certain level of low income….but Congress can’t save some paper and just put a $750 penalty on taxpayers who don’t have coverage? Even if you’re right this is analgous to those politicians who get candidates kicked off the ballot because the margins on their petitions are a quarter inch off from that specified by law.

          Had it been a public risk pool like Medicare, SS, etc., smoother sailing. But the lack of a “public option” was precisely why the bill managed to squeak through in the first place.

          Possibly but I don’t see why this is important. If a public risk pool is very important then champion it as an addition to the bill. I don’t see how it is relevant to the Constitutional question.Report

        • > But that would have defeated the whole purpose,
          > to compel the young and presumably healthy to
          > subsidize the private risk pool.

          This is not the correct way to look at this, by the way. In fact, it’s utter garbage.

          This whole idea that the “young and healthy” are subsidizing the risk pool is utterly meaningless if everyone always has coverage. It’s only a data point of value when people *don’t* have coverage.

          If the *actual* *amortized cost* of insurance is properly assessed, then the way the whole thing works is like this:

          Total Amount Contributed by Population = (Total Amount Withdrawn By Population) + (Expenses For Management).

          If “Population” == “Everybody”, then you’re not subsidizing anybody *except your future self.* Your rate is assessed by your lifetime projected expenses, spread across your lifetime payments.

          Yes, it does mean that *some* individuals will pay more into the system than they take out, just like *some* individuals will pay less into the system than they put in. But that’s not in any way “subsidizing”. That’s just risk amortization – which is what insurance is supposed to be in the first place. That’s the whole effin’ point.Report

    • Avatar MFarmer in reply to Boonton says:

      You people are just determined to be controlled. The only thing I can figure is that you think you’re going to get free healthcare. So the government can tax/penalize us if we don’t buy what they want us to buy? I’m confused. If the government says everyone has to buy a water filter, and those who don’t buy one have to pay a fine, then this is just a tax, not a mandate to buy water filters?Report

  21. Avatar BSK says:

    Will-

    I also wanted to thank you for your continued awareness of how your personal situation in life informs your opinion. One of my major complaints of most libertarians is how they fret over issues of liberty that are seem major to them but often pale in comparison to far greater issues faced by far more persecuted or marginalized groups. All of these issues are deserving of attention, but I think, as a function of privilege (be it race, SES, religion, gender, etc.) many libertarians often lose the forest for the trees.

    You should have seen the debate I got into with a bunch of folks over on Radley’s site who claimed that Native American groups who had signed, legal contracts violated by the US Government had no rights to reclaim the land stolen from them.

    Anyway, no need to respond, but I do appreciate your self-awareness on these issues.Report