Would a universal health coverage law had passed had we structured it as follows? All Americans will pay a dedicated tax — a new payroll tax, a VAT, what have you — and we’d create a new program called AwesomeCare. Every American would receive an AwesomeCare voucher, which she could use to purchase one of a wide variety of approved insurance products.

Well, maybe it would have. Provided that there is a truly wide variety of approved insurance products, as in the Federal Employee Health Benefits Program, this might be a pretty decent way to go, mainly because it is transparent in its accounting. The reason the new health law’s didn’t embrace this approach, I suspect, is that it would have made universal coverage appear far more expensive than simply mandating that people spend their own, i.e., “their own” disposable income to purchase insurance.

Simon Lazarus, writing in Slate, is making an interesting conceptual leap:

One of these Ryan budget proposals—as yet little noticed by pundits or politicians—is almost an exact copy of its equivalent in the Affordable Care Act. It would repeal the current exclusion from employees’ income of employer contributions to their health insurance premiums, thus terminating the subsidized employer-sponsored group health regime that covers nearly 60 percent of all Americans. In its place, the Republican plan would substitute a refundable tax credit, to be provided to individuals who purchase health insurance (or to employers who purchase health insurance for their employees). When this new arrangement takes effect in 2022, the tax credit would be set at $2,300 per adult and $1,700 per child, not to exceed $5,700 per family.
Like this Ryancare tax incentive, the “individual mandate” section of the ACA, which the White House calls the “individual responsibility” provision, constitutes a pay-or-play option. Beginning Jan. 1, 2014, when the ACA provision takes effect, individuals who do not qualify for exemption on hardship or other specified grounds, must either carry health insurance or pay a tax penalty as part of their annual income tax filing. The ACA caps individuals’ penalty liability at 2.5 percent of household income above the filing threshold, or a flat dollar amount ranging from $695 to $2,085, depending on family size.
Under both provisions, the result is the same: People who choose to carry health insurance have a lower tax bill than they would if they chose not to. In terms of their respective potential impact on individuals’ bank accounts and tax liability, the manner in which they affect individuals’ financial incentives, and hence the constraining effect on individuals’ financial choices to either buy or forgo health insurance, the two “mandate” provisions are identical. (Indeed, in most cases, the financial difference for the individual taxpayer made by the Republican tax credit would be greater—i.e., more “coercive”—than the ACA tax penalty.)

What would have happened had the new health law used a tax incentive like the Ryan proposal? And does the mortgage interest deduction compel me to buy a house? Lazarus moves on to Medicare:

According to the Congressional Budget Office, the vouchers would be worth approximately $6,000 for recipients age 65, and would be greater for older recipients, averaging $11,000 across the entire Medicare population. Of course, Americans would be required to continue to pay their annual Medicare tax throughout their working lives. Hence, the Republicans’ proposal to replace Medicare with partially subsidized private insurance also operates to “compel” people to pay for private health insurance policies. Moreover, this mandate is not even a pay-or-play option; Medicare taxes are mandatory, whether workers want to buy eligibility for old-age vouchers or not.

That’s right. My personal income taxes are mandatory whether or not I want to pay for an American military intervention in Libya. But tax-financed public services, whether delivered in centralized or decentralized form, are commonly considered to be distinct from a requirement that one purchase a privately-provided good, like a dwelling or a private insurance plan. Had the health law been structured cleanly as a tax-financed public program, the objection to the mandate would not apply. That is true even if the upshot is the identical, as Lazarus suggests.