Critical Condition

Make No Mistake: Folks Don’t Need an ‘Individual Mandate’

In the spirit of the Straw Man Bingo that the Republicans created for this afternoon’s speech by the president (which Kathryn Jean Lopez reports below) let me paraphrase President Obama as follows: “Make no mistake: Folks don’t need an individual mandate.”

Ceci Connelly of the Washington Post (whose publisher infamously solicited corporate sponsors to underwrite a “salon” in her own dining room, wherein they could discuss health-care issues with her reporters and editors, which exploded when leaked to the New York Times), writes that the “individual mandate” is the most popular element of the potential ”reform.”

She’s probably right: Folks don’t want a government-monopoly health plan like Canada has, but they want so-called “universal” coverage. Obviously, that means that health insurance can no longer be voluntary.

It also means that you have to have a whole bunch of rules and massive, tax-eating subsidies to ensure that everyone stays enrolled. It also means that you have to figure out how to prevent health insurers from gaming the system to enroll healthy people and avoid sick people, while maximizing their claims on the subsidies. Even in Switzerland and the Netherlands, where they have (arguably) the most sophisticated mechanism of risk-adjustment, they have not prevented this selection bias (pp. 15-16). And they have to subsidize 40 percent of households in order to ensure compliance (which accounts for at least half of health costs) (pp. vii-viii).

Remarkably, Ms. Connelly cites Massachusetts as a successful case of an individual mandate, citing Prof. Jonathan Gruber (a prime architect of Governor Romney’s “reform”) in favor of this government intrusion, which has reduced the rate of uninsured to about 3 percent of the population.

But “universal coverage” is not a stand-alone goal of health reform: Massachusetts has suffered busted state budgets, spiralling private costs, long wait times for treatment, and overcrowded emergency rooms as the “reform” succeeded primarily in driving up spending and little else (as analyzed recently by Michael Tanner and another by Grace-Marie Turner and Tara Persico). Now they’re talking about a state-wide “global” budget (like in the Canadian provinces) to control costs.

We don’t need an individual mandate: We need the freedom to choose our own health insurance.

— John R. Graham is director of Health Care Studies at the Pacific Research Institute.

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