There Is No Such Thing As Universal
Ezra Klein asks an odd question.
DO INDIVIDUAL MANDATES MATTER?
Lots of folks claim they don’t. They’re untested, or unimportant, or whatever else. So the Urban Institute, as august and respected a think tank as DC’s got, decided to run the numbers.
But I wonder: who claims that individual mandates don’t matter? If an individual mandate “didn’t matter,” surely there’d be no point in opposing an individual mandate? Actually, it seems pretty clear to me that individual mandates matter a great deal. I used to be in favor of them and I now oppose them. Why? Well, I used to think individual mandates didn’t matter that much — the administrative costs would be relatively low, they’d be easy to enforce, uncompensated care was a crucially important issue, the affluent uninsured were a serious burden on the healthcare system — and I’ve since concluded that most of these claims are in fact way off base. The administrative costs would be high, a mandate would be extremely difficult to enforce, uncompensated care represents a tiny slice of health expenditures, and the affluent uninsured are a minor problem. The real problem, unsurprisingly, is the large number of poor and working class people who can’t afford healthcare. That is a problem worth tackling. In fact, I could even be persuaded to support a larger public system modeled on the Veterans Health Administration. It is entirely possible to address these pressing problems without a mandate.
Now, as to the notion that achieving universal coverage is impossible without a mandate, that is of course true. It is so obviously true as to be trivial: if it is illegal for anyone to be uninsured, the uninsured will be criminals. Voting is compulsory in Australia and turnout is, er, pretty high. (There are many spoiled ballots, but that is a separate issue.) To be sure, there will still be “uninsured” individuals, including illegal migrants, etc. But these are legal nonpersons. Some of us, myself included, find the idea of criminalizing life choices to be deeply unattractive — so unattractive that it should only be done when absolutely necessary. Does the cause of guaranteeing that every American has health insurance coverage merit this kind of coercion? Again, please note that I believe that everyone who wants coverage and doesn’t have the means to pay for it should have some public alternative available. That involves spending far more money than we do at present, I’m guessing, or at least shifting tax subsidies in a more constructive direction. I’m really asking about the affluent uninsured.
Urban takes a stab at this question, rather misleadingly in my view.
The report is summarized as follows.
In this brief we conclude that, absent a single payer system, it is not possible to achieve universal coverage without an individual mandate.
Tautology. What is the alternative case — that everyone living within the borders of the United States voluntarily decides to purchase health coverage? Not a tough straw man to knock down.
The evidence is strong that voluntary measures alone would leave large numbers of people uninsured.
Again, obviously true. Uninsured — but what would be the social composition of this uninsured population? That is the essential question. The Obama approach, for example, seeks to guarantee that no one falls in the “wants coverage but can’t afford it” camp, which is the right goal.
Voluntary measures would tend to enroll disproportionate numbers of individuals with higher cost health problems, creating high premiums and instability in the insurance pools in which they are enrolled, unless further significant government subsidization is provided.
The devil is in the details. How many of the healthy, affluent uninsured will choose to remain uninsured if the cost of private coverage is sharply reduced thanks to expanded public programs, including federal reinsurance? The instability issue is real, and it will exist under any system that emphasizes choice of insurance provider. This is why large-scale public providers and opt-out systems are attractive. But is this a reason to criminalize the decision to remain uninsured? How far are we willing to go in punishing those who make that choice?
The government would also have difficulty redirecting current spending on the uninsured to offset some of the cost associated with a new program without universal coverage.
Again, we completely ignore the “difficulty” the government would have in enforcing this quixotic measure.
Some say, “we do it with car insurance!” Regulating automobiles, which involve a dense web of surveillance, regular registration, etc., is a piece of cake in comparison. Your right to drive can be revoked. What do you do to an incorrigible skinflint who refuses to buy health insurance?
The ongoing revolution in the biosciences makes these questions mostly moot. We are arguing about building a coercive apparatus to solve a social problem that won’t exist in the same form for very long. But of course that coercive apparatus will never go away.
In the Massachusetts experiment, the penalty for “going bare” and not either purchasing health insurance (if you can afford it) or registering for one of the state programs (if you can’t) is simply a tax penalty.
I can see where some will have strong philosophical objections to the whole idea. It remains to be seen whether the scheme will even have the intended positive economic effects on individuals and businesses or remain affordable within the state budget.
But I’m not seeing where the likelihood of “criminalizing” non-participants or “building a coercive apparatus” come in. For those who dislike the entire “universal coverage” movement, does it not make more sense to object on immediate grounds (either objecting on principal or because you believe the system won’t work) than creating a unlikely scare scenario?
— Liz K · Feb 2, 05:52 PM · #
Dear Reihan,
Next time, please explain what an “individual mandate” is at the beginning of a long essay on the topic. Off the top of my head, I don’t know what an individual mandate is, and I suspect I’m representative of a lot of potential readers in that regard.
Steve
— Steve Sailer · Feb 3, 09:49 AM · #
I think your analysis is spot on, and I agree with you that Obama has the right aim in targeting the contingent of people who want coverage but can’t afford it. However, do you think that his plan is the best one out there, or do you feel there are better alternatives to reworking the healthcare system?
— Allison · Feb 3, 07:23 PM · #
You’re exactly correct, Mr. Salam, about bio-sciences eventually making the political argument over mandatory health insurance moot. But the very real problem now exists concerning the large ‘boomer’ generation which will not have available all of the technological advances that bio-psychology and bio-sciences will eventually develop. Isn’t the political argument about retirement and health care costs actually reflective of the sense of panic our ‘boomer’ generation feels as they begin to enter the years when they are a financial cost instead of a financial contributor, and little has been accomplished to allay those very real fears among the ‘boomer’s’ working poor that their costs of health care during retirement will mean no retirement at all? Won’t the elderly simply decide not to retire—in order to pay for their health care costs—unintentionally creating another distortion in the labor market by freezing out teenagers?
Mandatory insurance coverage is an odious concept, but clearly free market choices have priced health care out of the reach of much of the middle class, let alone for the working poor. ‘Universal’ health care is only going to become ever more attractive politically as the ‘boomers’ retire; the Left appears to understand this coming demographic, our Right does not.
Economically, of course, the answer is to flood human life with choices; quality improves as prices fall. But health care costs have so dramatically outpaced ‘core’ inflation over the past twenty years that there is simply no time left for market choices to provide health care for the many millions of ‘boomers’ who began retiring in late 2007.
‘Universal’ health care is coming, by the simple expedient of the largest voting bloc in American history deciding that someone else’s taxes are going to fund their health care needs.
— a Duoist · Feb 3, 10:56 PM · #
The other point about auto insurance is that auto insurance is mandatory only to protect other people you drive into. It is not required to have auto insurance to protect your own vehicle in an accident.
— Steve · Feb 5, 05:13 PM · #
Has anyone considered levying a tax on medical services not covered by insurance? This would be a penalty which could be easily enforced, non criminalizing and would be socially acceptable. One problem with any discrimination between the insured and non-insured might be encountered with the Amish community. They do not have insurance, they pay cash on the spot. I’ve personally witnessed such a transaction. Maybe we’d need a conscientious objection status for them. Question: how does a politician cover all these things in a sound bite?
— Bill Schroeter · Feb 5, 10:00 PM · #