Even more politics I don’t understand – ctd.

I can be pretty hard on the press.  I figure I lash out at them every few posts.

Because of that I think it’s important to acknowledge actual reporting when it occurs.  So kudos to Igor Volsky.*  After reading my piece on Senator Wyden’s sudden distaste for the individual mandate, questioning what he was thinking, Igor apparently picked up the phone and asked:

Wyden believes that the more choices people have, the more vibrant and competitive the market and the lower the health care premiums. Wyden’s communications director Jennifer Hoelzer told me that it’s not that Wyden rejects the mandate; he just thinks states should have the option of opting out of it if they think they can do a better job of expanding access and lowering health care costs. She says that Wyden’s state innovation amendment is actually an “antidote” to those who want to repeal the individual requirement. “If you can do just as good or better than the federal law, you can apply for a waiver from that. And if you can cover your residents without a mandate, then you can go ahead and do that,” she said. “Maybe states do stick with the mandates, maybe they don’t, but what it says that all of these federal requirements, if you can prove that you can do just as good of a job without that, the federal government wouldn’t punish you for not complying.” “The federal mandate says you can do it in X,Y,Z and this just gives us the leverage to go a different way,” she said.

So apparently, Sen. Wyden wants options for states.  If they can accomplish the goals of PPACA without a mandate, then he wants to let them do it.

I don’t have a problem with that per se.  But I am not sure exactly how Sen. Wyden thinks states will get it done.  After all, even as Igor notes, states won’t be able to exempt themselves from the other requirements of the law.  There will still need to be community ratings, guaranteed issue, and so on and so forth.  You need the mandate (or a stiff penalty) in order to keep healthy people from gaming the system and opting out until they get sick.  This would lead to adverse selection, and make the insurance market unstable.  This doesn’t have to happen, and wouldn’t if people voluntarily all got insurance, but it’s the risk.

This isn’t a new theory, by the way.  Here’s the Urban Institute back in early 2008:

[W]e conclude that, absent a single payer system, it is not possible to achieve universal coverage without an individual mandate. The evidence is strong that voluntary measures alone would leave large numbers of people uninsured. Voluntary measures would tend to enroll disproportionate numbers of individuals with higher cost health problems, creating high premiums and instability in the insurance pools in which they are enrolled, unless further significant government subsidization is provided. The government would also have difficulty redirecting current spending on the uninsured to offset some of the cost associated with a new program without universal coverage.

I may give Sen. Wyden the benefit of the doubt that this isn’t all politics.  He did, after all, slip in the amendment that makes this position now possible.  So he might have felt this way for some time.

I’m confused, though.  The mandate was always part of his Wyden/Bennet plan.  I assume he had it in there because he understood the theoretical need for it.  While I appreciate his explanation, I still remain unconvinced his position would work for Oregon or other states.

*Seriously, Igor is my hero for the day.  I wish I could pick up the phone and get an answer from a Senator myself, but short of that, I’m thankful that he’s on the job.

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