The Mandate Is Now Winning 3-2 In The Courts–But Remains A Bad Idea

While rulings against the Affordable Care Act tend to get more publicity, a third judge has ruled that health care reform is constitutional. The latest case was heard in  the District of Columbia by a Clinton appointee. We now have three Democratic appointees ruling in favor of the law and two Republican appointees claiming it is unconstitutional. It remains to be seen how the Supreme Court will rule.

The ruling points out that to make one of the arguments against the law is to “ignore reality.” This could also be said for most conservative arguments on pretty much any topic these days.

While I believe the constitutional arguments against the individual mandate are nonsense, and that the mandate is not sufficient reason to oppose the necessary reforms in the act, it remains a mistake for Democrats to support the individual mandate. This is an old Republican idea which Democrats never should have adopted. There are other ways to handle the free rider problem.

The division here is often between the more traditional Democrats and those of us who vote Democratic primarily because we oppose the type of big government supported by Republicans which generally is more intrusive in the lives of individuals. Unlike conservatives, we also recognize that there are areas where government action is necessary when the market fails, such as with the individual insurance market.

The underlying problem here is that, while there are justifications for it, the individual mandate changes the perception of health care reform from something being done by government to assist those who desire assistance to something which is being imposed by big government. I know some on the left respond to arguments such as this by claiming it helps conservatives by using conservative frames. As I have argued many times before, they are wrong. Individual liberty has historically been the liberal position and liberals should both embrace this position and take it into consideration in the drafting of legislation. The old Republican position of using individual mandates to solve the free rider problem should be rejected in favor of alternative measures.

Many ideas have been proposed to handle the free rider problem to prevent people from waiting until they are sick to purchase health insurance if there are no restrictions on pre-existing conditions. We could have open enrollment periods like the voluntary Medicare Part D program, with those who purchasing outside of such open enrollment periods being subject to the old insurance company rules. There could also be higher premiums for those who sign up later, as is also done with Medicare Part D, to make up for the premiums not paid into the system when the individual was younger and healthier. There could be financial penalties, possibly enforced by the IRS, upon those who cost the government money by seeking health care coverage after failing to purchase insurance to compensate for this cost to society. Bankruptcy laws could be changed so that people who declined insurance cannot eliminate debts for health care. Changes such as this could limit the problems from the free rider problem, while eliminating the major reason why many on both the left and right have opposed the current plan.

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2 Comments

  1. 1
    John says:

    The above described alternatives to the individual mandate still look like the heavy hand of big government – basically punishment for not participating.

    Given the continued unhappiness over the individual mandate, it seems strange that payroll taxes for unemployment insurance, medicare, and social security are not viewed with the same umbrage. Why are those programs so widely accepted? Probably, because they work pretty well.

    The slow phase-in probably doesn’t help create a positive public perception of the ACA.

  2. 2
    Ron Chusid says:

    The alternatives still leave the choice of not participating and continuing under the current system. People could also go without insurance, and depending upon the alternatives may or may not face a penalty should they then utilize health care and shift the cost to others. Any alternatives would have to prevent people from gaming the system by not purchasing insurance until sick.

    Payroll taxes are partially accepted because they have been there as long as most remember. Typically new government programs are attacked as socialism when they are first proposed, and then those which work gain acceptance and only the far right continues to object.

    The slow phase in is a problem. It makes it easier for conservatives to continue to distort the plan as long as people don’t see the actual plan in practice.

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