What's Our Bottom Line?
DURHAM -- President Barack Obama has invited congressional leaders to a televised health reform summit Thursday. He has said he will make his preferred approach clear and ask Republicans to reveal theirs. Will anything productive come from this meeting?
In policy terms, a deal should be possible if they:
First, add medical malpractice reform, based on the mix of policies assessed by the Congressional Budget Office that would reduce the deficit by $54 billion over 10 years. This would reduce the cost of any bill, provide a politically popular reform and perhaps improve quality.
Second, given that both parties want to expand individually purchased health insurance, agree on the details needed to set up a better functioning market.
Third, replace mandated comprehensive benefits with guaranteed catastrophic coverage, allowing individuals to buy more if they want. Such an approach is more in line with Republican desires, and income-based premium support that is important to Democrats could be maintained.
Fourth, work together on the tax component. Many Republicans favor limiting the tax exclusion of employer-paid health insurance, and the president has moved in this direction by embracing a tax on high cost insurance (a de facto capping of the tax exclusion). If they can agree, the long-term cost saving potential would be enhanced.
Increasingly, Republican opposition to reform has focused on the individual mandate. Many Republicans in Congress who oppose this provision have publicly supported an individual mandate in the past. There are two possibilities. Either Republicans have decided they will oppose anything the president supports, or they have changed their minds. In either case, it would be useful if the summit could focus clearly on the merits and drawbacks of an individual mandate.
The primary argument against an individual mandate is that it limits freedom. All legislation limits freedom in some way, and there is always a choice to be made between freedom and achieving legislative goals. The Democratic health reform bills impose an individual mandate to buy insurance; in return, insurance market reforms such as banning the use of pre-existing conditions are enacted.
The individual mandate is not exceedingly popular, but banning pre-existing condition exclusions is very popular. However, the two go together. A ban without a mandate will simply implode the individual purchase insurance market. There is a cultural disconnect on this issue that the summit should address.
As a nation, we need to decide whether we want to move toward covering everyone. If we do, it will take a mandate of some sort. If we are unwilling to embrace an individual mandate, we need to realize that decision is inconsistent with moving toward universal coverage.
There is no example of a nation that covers everyone without some sort of mandate. The Medicare program is a type of mandate; you have to pay the payroll tax, and you are eligible for the program once you attain the requisite age.
Many nations enact similar programs to cover all of their citizens. Switzerland and the Netherlands mandate the purchase of private health insurance and cover most everyone in this way. Massachusetts has had an individual mandate since 2006 and now has 96 percent coverage. Hawaii has had an employer mandate since 1974 for full-time workers and has achieved 92 percent coverage.
Liberals are often accused of concocting legislative schemes that work only in their imaginations. Anyone espousing a goal of anything near universal coverage without some sort of mandate is engaged in a similar fantasy.
The reasons to cover everyone include improving health, reducing medical bankruptcy and decreasing free-riding that shifts costs to the insured in a way that hinders attempts to slow cost inflation. I believe the limits of personal freedom that come with an individual mandate are worth it. Others disagree. We have to decide.
If we decide we will not have a mandate necessary to universal coverage, we have to face up to the inconsistency inherent in expecting and requiring providers to give care to those who can't pay. And in shifting these costs to the insured via higher premiums, we subsidize such care in the most inefficient way possible.
We are in no man's land. We worry about the plight of the uninsured but appear unwilling to take the steps necessary to move toward universal coverage. We need to decide one way or another, accept the consequences and move ahead.
Donald H. Taylor Jr. is an assistant professor of public policy. His blog www.donaldhtaylorjr.blogspot.com is available for discussion of this article and health care reform in general. This is part of a series of articles by Donald Taylor exploring aspects of the health care reform issue originally published in the News & Observer.