Tuesday, December 21, 2010

Conservative Stupidity on Mandates

The individual mandate is an idea that was popularized by conservatives during the Clinton administration when the Clinton administration initial reform proposal included extensive employer mandates (which I think was and is bad policy). I don't really mind the mandate per se. I suppose it is somewhat odd that the federal government can require you to purchase a private product, this does seem like a new step (what about an iPod, broccoli, treadmill, how about a specific service- colonics anyone?). That said, it is only an incremental step from subsidizing homeowners or employees of certain firms and so on through the tax code. I suppose this explains my indifference.

In the end, there needs to be some pooling mechanism to prevent adverse selection. I do not view adverse selection as THE central health care problem but it certainly is a problem and could become a bigger problem. Thus, I think the mandate or some substitute is necessary. Maybe you could be required to post a bond in the absence of a mandate. In Germany if you opt out of health insurance you cannot immediately purchase health insurance in the event of a medical crisis, but rather must wait for a predetermined enrollment period (Paul Starr of the American Prospect made a proposal along these lines where the re-enrollment for an opt-out would be restricted to the January of a leap year, that seems pretty significant). To the extent that a subsidy is available for healthcare, such as a refundable credit, its availibility could be conditioned on the purchase of qualifying healthcare. Another alternative would be a federal re-insurance program along the lines of what John Kerry proposed during his 2004 presidential campaign (this type of policy is one that some republicans have embraced, though, they have focused on replicating this policy at the state level). Conservatives are advocating for private insurance and to keep government out of health care. A risk pooling mechanism is a predicate to a functioning insurance market. If the republicans should refrain from gloating unless they propose an alternative risk pooling mechanism.

hat tip: Avik Roy of the Agenda

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