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January 2 2012

New Republic: The Health Care Mandate Really Was a Mistake

Charlotte Hays

The Health Care Mandate Really Was a Mistake

--headline in the New Republic magazine

The idea of being forced by the federal government to purchase a product—in this case, health insurance—is clearly wrong in the minds of most people who read this blog. But this is a headline from the New Republic—yes, the liberal New Republic.

The author of the piece is Paul Starr, a Princeton University sociology professor who has written on health care reform. Starr argues that in including the so-called individual mandate to buy health insurance in the Patient Protection and Affordable Care Act (Obamacare) Congress miscalculated with regard to the courts, politics, and the policy.

Starr thinks that Democratic politicians make another mistake when they try to defend this unpopular law:

I understand the impulse to defend the Affordable Care Act when it is under unrelenting attack. But a mistake is a mistake, and supporters of the law—particularly Democratic candidates facing tough races in 2012—need to think through alternatives to the mandate in view of both the upcoming Supreme Court ruling and this fall’s election.

Whether the Court will overturn the mandate, we don’t know. But in drafting the Affordable Care Act, Democrats put at unnecessary risk their most significant domestic achievement of the past three years.

So far so good. This is good news for those of us who hope Obamacare will be overturned or repealed, giving the country second chance to get reform right.

But Starr doesn't think the mandate was a mistake because the public hates it. Hang that.

No, Starr just thinks the law could have been framed in a way that made it more difficult to overturn:

Keeping the same policy, they could have framed the mandate so it fell unambiguously under the government’s taxing power. Even just labeling the penalties for failing to insure a “tax” would have strengthened the argument for upholding the law and greatly increased the odds that the Court would invoke the 1867 Anti-Injunction Act, deferring the case until 2015, when the penalties would first be imposed.

The law wasn't too draconian. It was insufficiently so:

And Democrats could have avoided any constitutional challenge by adopting the alternative that I proposed, which eliminated the mandate by providing for a long-term (five-year) opt out from both the law’s benefits and its penalties. …

My alternative is both more libertarian and more tough-minded. Someone who doesn’t insure would have two alternative: 1) taking the opt out and forfeiting five years of benefits under the law (likely to be worth more than one year’s tax refund); or 2) going year-to-year and paying substantially higher penalties than the law now calls for--penalties that would have the legal status of a tax and be collected by the IRS as it collects other tax obligations.

And this seems almost spooky:

Evidence from studies in behavioral economics shows that people are very reluctant to take opt outs; I doubt that many would sign away their rights to five years of benefits under the law. But the year-to-year alternative would be more costly than under current law: increased penalties—possibly twice as high—fully backed by IRS collection procedures.

It may seem counterintuitive, but combining the long-term opt out with higher, enforceable penalties should generate higher levels of insurance coverage than can be expected under the law’s weak mandate

I'm not at all sure that Starr’s version of the mandate qualifies as “more libertarian.” It clearly relies on force even more than the law as written.

Welcome to liberalism, 2012.

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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