The New England Journal of Medicine has been a stalwart supporter of Obamacare. But even its editors seem to see the handwriting on the wall about the individual purchase mandate, evidence by its hand-wringing editorial penned by Jonathan Oberlander, Ph.D.. From “”Under Seige—The Individual Mandate for Health Insurance and Its Alternatives:
No provision is currently more beleaguered than the individual mandate to obtain health insurance or pay a penalty. Many analysts view this mandate as crucial to ensuring that healthier people join state-based insurance exchanges: since the law prohibits insurers from charging higher premiums to or turning away people with preexisting conditions, exchanges would otherwise attract disproportionately sicker, costlier enrollees. That adverse selection would drive up premium costs and threaten exchanges’ stability...
The mandate now confronts a legal and political backlash. Florida’s Roger Vinson recently became the second federal judge to deem it unconstitutional, and the issue appears headed for the Supreme Court. Some state legislatures are seeking to block the mandate’s implementation. A few Democratic senators, including Claire McCaskill (MO) and Ben Nelson (NE), who are up for reelection in 2012, say they’d like to find alternatives to the mandate. And while conservatives rail against the mandate and politically vulnerable moderates run away from it, many liberals support it reluctantly because of concerns that insurance remains unaffordable and that the requirement is a gift to the insurance industry.
Increasingly, Democrats may wonder whether the provision is an albatross that should be jettisoned to save reform. Inasmuch as the health care reform debate is defined by the mandate, Democrats have a problem. The policy is highly unpopular — 76% of Americans view it unfavorably — and makes reform seem punitive. Although Democrats can highlight other consumer-friendly provisions that target health insurers, in the mandate fight they are allied with the insurance industry. Furthermore, President Barack Obama could in 2012 be in the uncomfortable position of defending a mandate that he argued against in the 2008 Democratic primary.
Oberlander then looks at other options—but notably, ignores free market alternatives as if they haven’t been proposed. Single Payer?
It remains infeasible.
Make enrollment a once a year option—meaning if you fail to enroll, you may face big health expenses uncovered:
However, to induce healthy uninsured people to sign up, the late penalty might have to be substantial, in which case this arrangement would be operating similarly to the mandate. As the health care economist Len Nichols points out, if we don’t have the political will to impose a strong penalty in conjunction with an individual mandate, we probably wouldn’t have the will to impose one as part of a fixed enrollment system.
How about automatic enrollment and opt-out?
Once again, though, the late-enrollment penalty might have to be substantial for auto-enrollment to effectively induce healthier people to pay for insurance coverage. Inertia alone may not be a sufficiently strong force to get younger, healthier workers to stay insured, given high and rising insurance premiums. Auto-enrollment may also not work as well outside the workplace or for workers’ dependents.
But there are whole swaths of methods to expand access to care and coverage without government mandates. Let’s try honey instead of vinegar.
Perhaps we should help people who want health insurance but can’t get it, such as through assigned risk pools , currently under utilized by consumers under Obamacare, and vouchers for people who can’t afford premiums. Perhaps we should allow national competition to increase the number of companies pursuing the market and busting the quasi monopolies that exist in many states -which would reduce costs. Perhaps we should encourage high deductible policies that would be affordable and protect people from truly serious and expensive conditions—which would be banned under Obamacare. Perhaps we should encourage the formation of large groups, such as a (say) Home Office Entrepreneur Association, that would allow people to join and then seek bids for group underwriting. Perhaps we should permit health savings accounts. Perhaps we should promote price competition at the source. Perhaps we should allow full tax deductibles for privately purchased health insurance. Perhaps we should promote local based clinics in shopping centers and other places people frequent for low cost non urgent care. (I saw one in an airport the other day. Bravo!)
Then, if people choose to forgo available access and risk bankruptcy, that’s up to them, but perhaps—sticks are sometimes needed with carrots—such expenses should not be fully expunged in such cases.
In short, let’s explore options that treat people like adults.
