Can the Health Reform Law Work Without An Individual Mandate?

Don’t states mandate drivers to carry insurance? What’s the difference if the federal government says *you* must be insured?

…and no matter how hard Repubs may try to prevent it, HCR will be implemented.

Thanks, Kate. What are your latest insights on how court challenges to mandatory participation will stand up? I’m no fan of mandatory participation either, but in reality we have to participate in Social Security (esp. paying SSI taxes on earnings, this is one of their faq’s at website) so this isn’t brand new. Why would mandatory SSI be okay but HCI not? I’d appreciate your thoughts on this, Kate.

Great minds; between cars and Social Security we already have examples of mandatory participation. But let’s enjoy the upcoming RW’ers “rebuttals” here (and I’m already feeling sorry for Kate for the upcoming abuse from them in comments).

I never really liked the mandate. It gives a lot of useful ammo to those who were against HCR at all costs.
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We should have just gone for what would really work:
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UHC and taxes to balance it…

Not to split hairs, but the car insurance comparison isn’t quite accurate. You’re not required to drive a car. You’re only required to purchase insurance IF you drive a car. And some states have waiver processes available.
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Other than federal taxes, I’m not sure I can think of a mandate that is required to be paid by everyone. Not just required for those who participate.

Seconded.

Kate Pickert:
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You mention

But dig a little deeper and you realize that such a narrow restriction on price variation means that healthier people pay more. Vermont’s law makes insurance more expensive and doesn’t blunt that effect by pulling everyone – including health people – into the system.

How did you “dig a little deeper,” if you don’t mind me asking?
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What was the well of sources for that realization, in other words?
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“Vermont’s law makes insurance more expensive?”
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Don’t you mean to say “Vermont’s law still allows insurance to be more expensive, because insurers still fix prices, due to the anti-trust exemption enjoyed by state-based health insurance cartels?”
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Is it your impression that insurance rates are primarily a direct function of health care costs? Do you really think that, if, say, the price of MRI’s suddenly went down to Japanese levels due to some theoretical Federal pricing schedule on what could be charged, insurers would automatically build that cost reduction into their premiums? Isn’t that…a tad unrealistic, given the lack of competition between insurers?

this will drive prices up for everyone and lead to an insurance death spiral. (Since insurance rates will go up and up for healthy people, they will stay out of the system until they’re sick. Eventually, the only people buying insurance are sick people, driving the rates up and up even more until the system collapses.)

For a seasoned reporter, your credulity is slightly disturbing, Kate Pickert.
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I suppose in the absence of any other regulatory framework, yes, individuals not covered under their employers’ group plans who immediately need medical care will tend to purchase gold-plated insurance, others will tend not to.
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Why wouldn’t health insurers simply be driven to devise cheaper and better solutions to the cost of doing business? Why wouldn’t they, say, scrap the expensive underwriting schemes, fire the third-party rescission investigators, trim their marketing budgets and limit bloated executive compensation –like Humana CEO Michael McCallister’s 5-year, 15.10 million dollar package, for example?
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http://www.forbes.com/lists/2006/12/AG0Q.html
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And your premise is noticeably absent further health care price regulation. You assume that the price of what insurers pay for, e.g. laboratory tests, doctors’ visits, specialist care, hospital stays and prescription drugs, will skyrocket indefinitely, so that insurers need ever more money to break even. If the price of health care itself were to be federally scheduled in a different way –the drug importation bans being lifted comes immediately to mind– wouldn’t that put downward pressure on premiums, all things being equal? Why is that sort of thing not factored into a presumed solution to the “death spiral” down the road, Kate Pickert? Why is the answer an individual mandate or nothing, at least in your mind?
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And this is also curious:
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[Vermont’s law] doesn’t blunt that effect by pulling everyone – including health people – into the system
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, because your assumption –that market forces will somehow operate freely to lower insurers’ costs, and therefore prices– doesn’t take into account said legal price-fixing and artificially limited (no interstate competition) state-based insurance markets.
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So, again, what does “dig a little deeper” mean, exactly?
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Where are you getting your assumptions for how things “should” work in US health insurance markets?
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It sounds from the way that you’re phrasing things that you’re getting your ideas from the same think tanks from which folks like the Bipartisan Policy Center are also borrowing.
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Do you derive most of your basic premises on what should or shouldn’t “work” in terms of government health care policy from mostly Third Way policy institutions (with a little bit of AEI thrown in for good measure), Kate Pickert?
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Is that why you sound like you’re writing for a DLC newsletter circa 1995?

“Other than federal taxes, I’m not sure I can think of a mandate that is required to be paid by everyone.”
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That’s why without a public option this has never made sense to me.
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Mandating citizens to pay money to a private business?

But like vehicles, bodies break down too. Don’t insurance cos pool $ from policyholders so the overall rate costs won’t be astronomical?

Medicare.

Mandating citizens to pay money to a private business?
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Good thing SSI didn’t get privatized. Banks and Wall St. firms already took our money during TARP, etc. Imagine them getting hands on our retirement money. BTW, here’s SSI faq on mandatory taxes – http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/200/kw/is%20social%20security%20mandatory

“What Dean said that was surprising is that he believes the individual mandate is unnecessary. Huh?”

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What rational and sane individual would believe this nut-ball Quack anymore anyways?

I hate to break the news to you, but SSI is a government program. Do you really not understand the difference between the government forcing you to pay taxes and the government forcing you to buy a private service, particularly from an uncompetitive industry?

Most importantly, Dean is right on the politics. We can debate the impact of losing the individual mandate. Whether the existing scheme can survive without it. But, regardless, people don’t like it. It is bad politics. And Dean is smart to distance himself.
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If we are lucky (and I strongly doubt it) Dean is setting himself up for a 2012 primary run.

After gains in three straight cycles he gets the boot from the DNC by BHO-which was BHO’s prerogative.
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Dean’s position will only strengthen after November.

I mean TWO cycles. 2006 and 2008

Why a real public option was so important, contrary to what the Village scribes were telling us.

The free rider and cost spiral problems are phony. The insurance industry made them up in order to get what amounts to a giant subsidy turned into law. There really isn’t a significant free rider problem in health insurance, not in Vermont where there is no mandate and not in Mass. where insurers have claimed the penalty is too low. People prefer to have insurance when it’s affordable and fair, you don’t have to force them.

That is some prime grade-A irony there, you betchya.

stuart: So good to hear from you. As someone who worked in the health insurance industry as an employee of a 3rd party administrator of a state health insurance plan for small business and also for SCHIP, you are spot on.

momento: HA! *snort* Brilliant!
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To paraphrase Bill Clinton: “It all depends on the meaning of the word ‘this’…”

@ deconstructiva:
Just want to clarify some initials you are using in reference to Social Security.
“SSI” are the initials used for “Supplemental Security Income,” a disability program for people who have not contributed to a Social Security account. (Sometimes children who are disabled are granted SSI; oftentimes it is thought of as “disability for the poor.”
“SSI” is not what we think of as traditional Social Security, except that it’s administered by the Social Security Administration. (Usually govt. workers just refer to Social Security as “SS” or “SSA” in order to completely differentiate it from the “SSI” program.)
Within the Social Security Administration, there is also Social Security Disability for those who did contribute to SS during their working life and have been determined to be totally and completely disabled. The initials for that program is “SSDI.”

initials *are* SSDI.

Thanks so much for reading and the compliment, apr2563.

I would not count those chickens just yet,nflfoghorn. As this bill unravels, we are finding no ceiling to the escalating costs and the fact it will prove to be virtually unmanageable (at any level) gives pause to its actual implementation. Couple this with the very real possibility of having doctors derailing it, by refusing to accept any new medicare patients. Missouri was its first referendum and it was overwhelmingly (71%)rejected by the public. Repeal this abysmal monstrosity and start again, from square one….this time listening to health care professionals who will ultimately be charged with the responsibility of making it work.

“If we are lucky (and I strongly doubt it) Dean is setting himself up for a 2012 primary run.”

LOL. Even Dean is the masochistic

Earljr,
…after further review, the opinion stands as called. It ain’t happening. Sorry.

Assuming you are correct, and not merely guessing, Kate, the healthy have to pay considerably more for insurance in Vermont. And yet still only 10% are uninsured. That seems to prove Dean’s point. People are still buying in to the system, and more to the point, enough people are buying into the system that it isn’t in danger of dying.

I agree with the economists that people should wait until they get sick to buy health insurance, if there is no penalty at all for doing so. But they won’t. We are not purely rational actors. The doomsday scenario will not happen in the real world, and this is evidence to that effect.

And if you really feel the need to do something about this mostly imaginary problem, you really don’t have to be all that creative to come up with alternatives forcing people to buy a private service.

blossom, many thanks for correcting this.

That’s an incredibly false analogy. First of all, the liability insurance requirement is done at the state level, not the federal. Second, and most importantly, you can CHOOSE whether or not you want to drive or not, not everyone drives, because driving is a privilege, not a right.
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You don’t have a choice in the matter of the individual mandate. This is a requirement no matter what, for everyone, unlike with liability insurance where it’s just for people who choose to drive.

I am not 100% familiar with the law everywhere, but at my last job we were automatically enrolled in the company’s health insurance and could not get out of it unless we had proof of alternate insurance (say from a spouse’s plan). We could opt for the “$15/month for complete junk coverage” plan if you really wanted, but it was a condition of our at-will employment.
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These companies had an incentive for their employees to be covered under something, considering how the uninsured are more likely to become ill, not have preventative care (not like normal insurance actually encourages preventative care, but still), and otherwise be more likely to miss work or potentially become disabled. Since health insurance is basically something you auto-enroll in whenever you get a full-time job, I am not particularly surprised at the 10% figure, at least not until that is compared to the unemployment rate.