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Your Daily Dose Of Health Policy

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Now that Hillary Clinton has followed John Edwards in endorsing an "individual mandate" model for universal health care, lots of people are asking questions about the model -- some good, some not so good.

In Business Week, columnist Glen Whitman raises several objections. It's difficult to enforce a mandate that everybody buy insurance, he says; just look at how many people don't carry car insurance, which states supposedly require of all drivers. And even if the government could enforce a mandate, he continues, it wouldn't generate enough money to pay for the cost of covering the uninsured.

Yes, Whitman concedes, there are some "free riders" -- people who could buy insurance but don't, then force the rest of us to pick up the costs of their health care expenses (through charges passed along to us as higher taxes or private insurance premiums, and so on). But all the money from all the free riders still wouldn't cover the cost of giving everybody health insurance.

So instead of adding a mandate that people buy insurance, Whitman concludes, why not take away some mandates -- namely, the ones on benefits and such that drive up health insurance costs in the first place? As he puts it, "if the real concern is making health insurance and health care available to those in need, we should focus on reducing health-care prices and insurance premiums. The individual mandate is, at best, a distraction from that goal."

My colleague Josh Patashnik makes a similar argument in the item below. Citing Whitman, he suggests candidates like Clinton and Edwards (though he doesn't name those two) are being borderline dishonest for saying that a mandate alone would create enough money for universal coverage: "...there's simply not enough revenue to be gained from cracking down on free-riders; if you want universal coverage, you're going to have to find other money to fund subsidies."

Josh also thinks this is a point in favor of Barack Obama's position. Obama, as you may recall, does not call for an individual mandate -- at least not right away. Lots of folks said this was a failing of his plan. Josh thinks otherwise, concluding. "In this light, Barack Obama's approach--holding off on imposing a mandate until insurance markets can be made to work better and the subsidies are in place--starts to look more reasonable, despite the barrage of criticism it's earned him."

Then there is Matthew Yglesias. Taking off from the same practical concerns -- and citing Tyler Cowen
-- Matt suggests maybe this is a good argument for simply going with an entirely different reform model. Wouldn't it make more sense just to create one public insurance program -- in other words, a single-payer program -- and just enroll everybody (presumably letting them opt into a private plan only if they so choose)?

Whew, that's a lot. Let me try to take them one by one, starting with the question of how much money a mandate generates, whether it'd be enough to cover the uninsured, and whether those who favor the model have been misleading people about financial reality.

The premise is almost certainly correct. Capturing contributions from "free riders" -- in other words, making people who can afford insurance pay for it -- most likely will not generate enough money to pay for all of the presently uninsured.

Where Whitman, and Josh, go awry is in suggesting that individual mandate advocates like Clinton or Edwards pretend otherwise. Both recognize it will take additional money to cover the uninsured, at least over the short term. How do I know that? Because Clinton and Edwards (like Obama) have identified separate funding streams that they would use to finance universal coverage -- starting with the Bush upper-income tax cuts, which they would allow to expire. (Note that this exposes them to the charge of "raising taxes," so you can't really go after them for political expediency on this count.)

And that's not the only additional funding they have in mind. Remember how Whitman chided reformers because they didn't "focus on reducing health-care prices and insurance premiums"? Well, both Clinton and Edwards -- and, again, Obama -- have proposed doing precisely that. The difference is that the Democrats running for president don't attack prices the way Whitman would prefer. Instead of just gutting mandates -- a favored conservative strategy that, unfortunately, tends to shift costs to people with the worst medical conditions -- they propose to set standards for quality health care and reduce some of the inefficiencies inherent in our haphazard, non-universal system.

It's fair to question just how successful those strategies will be. But it's not at all fair to suggest that Clinton, Edwards, and those who support their model of reform have ignored the price issue -- which is what Whitman and Josh seemed to be suggesting.

That's not to say the argument against mandates has no merit. Enforcement could indeed be tough; requiring people to buy insurance is morally problematic if the insurance isn't really enforceable. Obama's advisers, among others, have made these arguments -- and they deserve serious consideration. At the end of the day, I think the case for mandates is stronger than the case against, which is why I like the Clinton/Edwards approach better. But it's a matter on which reasonable people can disagree.

Now, onto Matt's concern. Here, I think, we have a far more legitimate dispute. Matt wants to know why, given all the potential problems of an individual mandate, why not just go with a single-payer system? On purely substantively grounds, I agree completely. If the government simply enrolled everybody in a public program -- with the right to opt out and choose private insurance instead -- that'd be far simpler and, most likely, a lot more efficient.

The problem, as Paul Krugman rightly points out in his blog today, is political. Such a program probably wouldn't pass. It'd require raising more taxes -- a tough sell even though people would end up paying less money in the long run -- and it'd require forcing most people to change insurance -- also a tough sell, even though most people would be better off.

Is that political calcuation correct? There's no way to be certain, particularly at this stage in the debate. That's why Krugman, among others, has been careful to tout single-payer as the ideal -- even as he's said good things about the individual mandate schemes. (I've tried to do the same thing.)

Still, it takes sixty votes in the Senate to make universal health care a reality. And, rightly or wrongly, a lot of more conservative senators simply can't stomach the idea of creating such a large government program on the spot.

--Jonathan Cohn

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