Yes, Ryancare Has A Mandate

The New Republic

You have read:

0 / 8

free articles in the past 30 days.

Already a subscriber?

Log in here

sign up for unlimited access for just $34.97Sign me up

JONATHAN CHAIT MAY 9, 2011

Yes, Ryancare Has A Mandate

[Guest post by Simon Lazarus]

Conservative bloggers (at National Review, Weekly Standard, and Hot Air) strenuously dispute a point I elaborated May 3 on Slate – that the Affordable Care Act’s “individual mandate” closely resembles major components of House Budget Committee Chair Paul Ryan’s Roadmap for America’s Future. Specifically, two Ryan Roadmap provisions utilize the tax code to pressure people to pay for private health insurance in ways not materially different from and no less (indeed, if anything, more) coercive than the ACA mandate.

Despite their evident fervor (National Review’s Ramesh Ponnuru called “amoral” what he characterized as the “Romney/Lazarus argument”), none of these responses gainsay this Obamacare-Ryancare parallel. Indeed, not only these two current rival plans, but longstanding existing social insurance programs, employ similar incentives and requirements to an essential common end – ensuring a broad pool of contributions. In particular, Representative Ryan underscored this congruence when asked by his constituent, “Isn’t [Ryan’s Medicare “premium support” proposal] “an individual mandate...to buy private insurance?” Ryan did not deny – indeed, expressly acknowledged – that his proposal amounts to a “mandate.” Rather, he stressed its familiarity. Referring to his proposal, he said:

[I]ts mandate works no different than how the current Medicare law works today, which is you just select from a wide range of different plans. It literally would be like Medicare advantage, which is you pick among the plans you want and Medicare subsidizes the plan.

Of course, Ryan is precisely correct. But that’s the point. His mandate is indeed like Medicare Advantage (the program that permits Medicare recipients the option of receiving Medicare-equivalent coverage from private insurers). But by the same token, both are like the ACA.

Even more “like” the ACA mandate is a second Ryan Roadmap provision, its approach to providing health care for adults under 65, hence not eligible for Medicare. Ryan proposed to replace the current exclusion from income of employer contributions to health plan premiums with a tax credit to individuals who purchase health insurance. As cogently noted by a friend-of-the-court brief submitted by the Service Employees International Union in one of the pending ACA legal challenges, “Both methods [a tax credit for buying insurance and the ACA’s tax penalty for not buying it] afford the taxpayer the same choice with the same effect,” and, hence, it is “meaningless formalism” to contend that Congress is or should be empowered to offer that choice and effect through the former technique but not the latter.

Unlike Ryan’s prescription for replacing Medicaid, this tax credit to encourage under 65ers to purchase health insurance is not included in the House Republicans’ FY 2012 budget that the lower chamber adopted April 15 on a virtual party-line vote. But that difference – overlooked in the original version of my Slate article (swiftly corrected) – has no effect on its bottom-line point: incentivizing people to contribute to social insurance plans from which they will or can benefit, is as commonplace, as bipartisan, as American – and as constitutional – as apple pie.

Ponnuru objects that there remains a crucial difference between the ACA mandate and a tax credit incentive like the Ryan Roadmap proposal. He notes that the ACA provision is set out as a legal requirement, which “people have [a moral] obligation to obey.” Certainly, it was appropriate to add such a measure of moral suasion to the law’s incentive package, whatever its real-world impact. Congress’ declared purpose was to induce people to honor their moral obligation to help shoulder their own medical costs, and not count on free emergency room care to shift those costs to taxpayers, providers, and insurance premium-payers. As then-Governor Romney said when he signed Massachusetts’ reform law with its similar mandate feature, “Free-riding on the government is not libertarian.”

But, more important, the ACA provision operates by unambiguous design as a pay-or-play option. Paying the penalty relieves taxpayers of the obligation to purchase insurance. This is not standard practice; ordinarily, paying statutory penalties does not let violators off the hook of complying, e.g., in the case familiar to us all, of penalties for late or unpaid taxes. Even the penalty provisions themselves are crafted as reasonable incentives rather than punishments: penalties are not assessed at all against people with incomes below the income tax filing threshold; penalty amounts are calculated as (small) percentages of the taxpayer’s income above the filing threshold; they are not applicable at all to taxpayers for whom buying minimum insurance coverage would cost more than eight percent of their income. Moreover, the law specifies that individuals who fail to pay the penalty are not subject to criminal prosecution for tax evasion, nor is their property subject to tax liens or levies.

Representative Ryan has been credited with going beyond his Republican colleagues’ incessant hyperbolic rhetoric, to sketch a framework of the policies with which they would replace the new ACA and the rest of the nation’s safety net. His effort confirms one key fact: even highly regressive social insurance schemes need requirements or incentives to ensure a broad contribution base. In terms of how and how much they constrain individuals’ ability to opt out, any such provisions are likely to resemble each other quite closely.

As noted in my Slate piece, Speaker John Boehner was quick to acknowledge Ryancare’s common ground with the ACA, trying to deflect an ABC News interviewer’s suggestion that it would cripple Medicare. In the same vein, Texas Republican Senator John Cornyn protested that the Ryan Medicare makeover is “exactly like Obamacare. It is. It’s exactly like it.” It would be constructive if they could follow up by dropping, in court and on the stump, their pretense that the Obamacare “mandate” is an unprecedented threat to freedom.

share this article on facebook or twitter

posted in: jonathan chait, weekly standard, medicare, paul ryan, ramesh ponnuru, ryan roadmap, simon lazarus

print this article

SHARE YOUR THOUGHTS

You must be a subscriber to post comments. Subscribe today.

Back to Top

SHARE HIGHLIGHT

0 CHARACTERS SELECTED

TWEET THIS

POST TO TUMBLR

SHARE ON FACEBOOK