• The father of the individual mandate

    The title of Ezra Klein’s post is “An interview with Mark Pauly, father of the individual mandate.” You should read the interview to find out why (if you don’t know). Here’s a portion:

    Was the constitutionality of the provision a question, either in your deliberations or after it was released?

    I don’t remember that being raised at all. The way it was viewed by the Congressional Budget Office in 1994 was, effectively, as a tax. You either paid the tax and got insurance that way or went and got it another way. So I’ve been surprised at that argument. But I’m not an expert on the Constitution. My fix would be to simply say raise everyone’s taxes by what a health insurance policy would cost — Congress definitely has the power to do that — and then tell people that if they obtain insurance, they’ll get a tax break of the same amount. So instead of a penalty, it’s a perfectly legal tax break. But this seems to me to [be] angelic pinhead density arguments about whether it’s a payment to do something or not to do something. (Emphasis mine.)

    Mark Pauly is quite reasonable and not entirely supportive of the ACA (nor am I, but he’s even less so). To me, that makes his take on the mandate more likely to be based on reason and the merits and less so based on which party passed the law. In general, I find nuanced thinking a hallmark of credibility. Few things are all terrible or all wonderful.

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    • You might have surmised that Pauly is who got me interested in knowing more about “guaranteed renewability at class average rates.” I found his “Health Reform without Side-Effects” remarkably lucid, if frustrating at times (I don’t like normative arguments based on premises about the “point” of health insurance, e.g.). But it’s a must read. All the more curious is that it wasn’t released until the ACA was basically a done deal.

      It’s available for download in its entirety here: http://www.hoover.org/publications/books/8131

    • @Austin — Cool. Would be interested to see if you think Pauly’s book is a useful contribution.

      Also–and I hope it’s obvious that you’re totally free to ignore this–I do wonder what you think about Paul Starr’s alternative to mandate (which has got Atul Gawande’s support: http://twitter.com/#!/Atul_Gawande/status/32770886998171649)

      I find it hard to see how permitting people to opt out of the mandate addresses two central issues that Ezra Klein (and many others) has put front and center. The first is uncompensated care in the ER. Obviously letting people opt out of the mandate (on the condition that they do not seek health insurance for, say, five years) is not going to keep them from showing up at the ER when they get sick. But so much of the argumentation behind the mandate is predicated upon the putative injustice of this cost-shifting.—As an aside, I have always found this cost-shifting argument curious, since the amount that the average person must pay in increased permiums/hospital fees/etc in order to cover uncompensated care is surely (or is it?) more than the average person would have to pay in increased taxes to pay for subsidies under ACA. After all, doesn’t lots of research show that preventive care (which subsidies partially pay for) is expensive and does not reduce health spending in long-run?

      The second issue that the Starr “fix” doesn’t seem to address is the fact that the mandate is there for two reasons: (1) it is there to keep people from free-riding (i.e. buying health insurance only when they get sick. But (and contra John Goodman) there is a second reason: it is designed to force the healthy and low-risk people to cough up the premium dollars needed to pay for the care of the unhealthy and high-risk people. In the absence of something like Medicare for All, this second reason would still exist even if the Starr alternative could effectively prevent free-riding.

      So I am very, very confused about how the opt-out option is supposed to be a viable alternative to the mandate.