Joe Biden, former vice president and 2020 Democratic presidential hopeful, said Friday he would bring back the individual mandate, the penalty for not having health insurance, which was a pillar of the Affordable Care Act.
“Yes, I’d bring back the individual mandate,” Biden said in an interview on CNN. The individual mandate would be popular now, “compared to what’s being offered,” he added.
This is a bizarre thing to be saying in 2019.
In designing Obamacare, the law’s authors had what was sometimes called a “three-legged stool” in mind. One, prohibit insurance companies from charging higher prices to people with preexisting conditions. Two, because this will tempt people to wait until after they get sick to buy insurance — a behavior that drives up premiums and can lead to the dreaded “death spiral,” where each premium hike causes more healthy people to leave the market, leading to another premium hike — simply require everyone to get covered. And three, to make sure everyone can buy insurance, offer subsidies to those who can’t afford it.
The importance of the mandate is clear if this is how you see the law. It’s the thing that stops the preexisting-condition protections from setting off a death spiral.
But that’s not how Obamacare worked out in practice. The folks who join the exchanges tend to receive generous subsidies — which rise when premiums do — so they’ll sign up before they get sick even if they aren’t forced to. (For those who don’t get subsidies, the mandate was never all that effective to begin with, and inflicted considerable harm on those forced to buy overpriced plans with features they didn’t want or need.) Put differently, the “carrots” (subsidies) were far more important than the “stick” (mandate).
As I explained in a piece early this year, this isn’t to say there are no tradeoffs here. Killing the mandate does increase premiums, maybe 6 to 10 percent. It also means some people will choose to go without insurance, or to buy skimpy plans that don’t comply with Obamacare (an option Trump has expanded). But these are far milder consequences than Obamacare’s architects envisioned, and thus a far weaker argument for forcing people to buy a product against their will.
There’s also, of course, the politics here. PolitiFact has noted that the mandate was “the least popular of the Affordable Care Act’s changes,” though the degree of opposition depends on which poll question was asked and when.
As Kyle Smith put it last week, Joe Biden’s main job in this race is to look moderate and reasonable. Resurrecting a policy that was unpopular and surprisingly ineffective is an odd choice for such a candidate.