The Agenda

There Are Many Good Alternatives to the Individual Mandate

I’ve harped on this before, but Howard Gleckman reminds us, perhaps unintentionally, that there are many relatively attractive alternatives to the individual mandate in PPACA:


Health consultant  Bob Laszewski, for instance, suggests dumping the mandate and replacing it with a system that allows consumers to buy insurance with no limits on preexisting conditions–but only when they start a job or are first eligible to buy coverage through an exchange. They can wait to purchase if they choose. But if they do delay, they would not be covered for any pre-existing condition for two years.

Gail Wilensky, a top health advisor to President George H.W. Bush, would charge higher premiums to those who wait to enroll, much as Medicare does today. Of course, both Gail’s and Bob’s plans are taxes too, but they somehow sound more palatable than a mandate.

When Gleckman says that Gail’s and Bob’s plans are taxes, I’m not quite sure what he means. Does he consider the penalty under the mandate a tax? Gail’s and Bob’s plans don’t impose a cash penalty. So perhaps Gleckman considers the insurance premium itself to be a tax, in which case the CBO score for PPACA would look very different. Another possibility is that Gleckman sees the incremental difference in the insurance premium between when’s charge when you sign up during the open enrollment period and when you don’t as the tax. But that seems fairly fine-grained. 

Lewin Group vice president John Sheils  has a somewhat different idea. He’d create a very limited “open season” each year during which people could enroll. If they failed to sign up in that narrow window, they would have no coverage until the next enrollment period.

This strikes me as another reasonable approach, though of course it raises the question of whether we should set a default, and what that default or rather what the default-setting mechanism ought to look like. 


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