Reason Writers Around Town: Associate Editor Peter Suderman on ObamaCare's Individual Mandate in the Manhattan Institute's Medical Progress Today
In the Manhattan Institute's health policy newsletter, Medical Progress Today, Reason Associate Editor Peter Suderman explains why the individual mandate to purchase health insurance is the major provision in ObamaCare that's most in jeopardy—and looks at several possible alternatives.
Republicans aren't likely to have much success repealing last year's health care overhaul before the next presidential election, but they may prove more successful in chiseling away at individual provisions. And of the law's major components, the individual mandate—which requires nearly everyone to purchase health insurance or pay a federal penalty—is arguably the most in jeopardy.
Even so, it won't be an easy task. The mandate was put in the law for a reason: Many policy experts believe the requirement is the key to the law's success. If legislators decide to take out the mandate, they will be pressured to consider replacement policies. Yet most replacements have drawbacks, and it's not clear that any of those alternatives will reduce the federal government's massive expansion into health care markets.
It's easy to understand why the mandate has come under such intense fire. It is both legally dubious and widely disliked. More than 20 state attorneys general have signed onto a lawsuit challenging the provision's constitutionality, and one judge has already agreed that it lacks constitutional merit. In surveys, it's consistently one of the least popular provisions in the bill. Republicans in Congress are busy telling supporters that they've already placed the provision near the top of their target list.
Even some Democrats have expressed wariness about the provision. Former Democratic National Committee Chair Howard Dean has argued that it's mainly "great for insurance companies," and should be scrapped. Oregon Sen. Ron Wyden has introduced a law that would allow his home state to opt out of the mandate. And while on the campaign trail, even President Obama opposed it as unnecessary and burdensome.
Yet soon after taking office, Obama relented. His health reforms would be built on what policy experts referred to as a "three legged stool." Insurance companies would be strictly limited in their ability to charge more to those with preexisting conditions and other health risk factors; they would also be required to sell policies to anyone, regardless of health history. But those two key consumer reforms would create an opportunity for customers to game the system by waiting until they were sick to buy insurance. An individual mandate would force everyone to buy in, and thus keep gaming to a minimum.
Read the whole thing here.