That’s the headline of my latest piece at Vox.
Adopting mandates at the state level would help stabilize insurance markets, thereby keeping premiums in check and forestalling coverage losses. It would also provide a welcome source of revenue: Some people will still prefer to pay a penalty than buy insurance. Plus, the states don’t need to stick with the precise terms of the federal mandate, which has been reviled (from different quarters) both for heavy-handedness and its ineffectuality. Stiffer state-level penalties would still be unpopular, but at least they’d work better.
States with an income tax could enforce the mandate by way of a tax, as the feds now do. But states without an income tax have options, too. Their state health departments could impose the penalty as a standard-issue fine — something like a parking ticket — and enforce the fine through liens, civil penalties, and the like. Getting a driver’s license or renewing an occupational license could be made contingent on compliance with the mandate. (Alternatively, residents could demonstrate financial hardship.)
I had to leave some of the piece on the cutting-room floor, including the following point:
The more blue states do to preserve their markets, the more they protect the ACA from congressional attack. We’re witnessing that dynamic play out now. President Trump’s abrupt termination of the cost-sharing subsidies was a brazen effort to sabotage the ACA. But a canny move by state regulators—known as “silver loading”—has largely shielded consumers from price hikes associated with the loss of that funding stream. Indeed, because of the complex financial machinery of the ACA, stopping the payments means that most people in most states will pay less for coverage. Only the federal taxpayer loses.
Moderate Republicans, Senator Alexander in particular, have offered to restore the cost-sharing payments in exchange for Democratic concessions, including some that could undermine the ACA. But Senate Minority Leader Chuck Schumer has ruled out cooperating with Republicans if they torch the mandate, and the threat is credible: because of the silver switcheroo, Democrats have less to gain than is commonly understood from cutting a deal. Republicans are stuck. Other blue-state patches will similarly drain support from congressional efforts to tamper with the ACA.
If you’re curious, I’ve got a draft of model state legislation that would straight-up replace the federal mandate. David Anderson has also drafted state legislation that takes a somewhat different approach.