Splitting the Difference on Mandates

Splitting the Difference on Mandates

Jacob Hacker wades into the great mandate debate this morning in the LA Times. He argues that the sturm und drang over mandates is overblown:

Still, I do not believe that the individual mandate is essential to healthcare reform, as its supporters suggest. That’s because Obama and Clinton have rightly rejected reform based on the individual purchase of insurance, choosing instead to allow most people to obtain subsidized coverage through their employers. By emphasizing the individual mandate, Clinton is shifting attention from this fundamental and popular feature of her (and Obama’s) approach and actually may be hurting the cause she cares so deeply about.

The cornerstone of both Clinton’s and Obama’s plans is the same: Employers must provide coverage to their workers or enroll them in a new, publicly overseen insurance pool. People in this pool could choose either a public plan modeled after Medicare or from regulated private plans. Both candidates have promised help for middle- and lower-income Americans, and both have said they will cut costs through administrative streamlining, prevention and quality improvement.

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Jacob Hacker wades into the great mandate debate this morning in the LA Times. He argues that the sturm und drang over mandates is overblown:

Still, I do not believe that the individual mandate is essential to healthcare reform, as its supporters suggest. That’s because Obama and Clinton have rightly rejected reform based on the individual purchase of insurance, choosing instead to allow most people to obtain subsidized coverage through their employers. By emphasizing the individual mandate, Clinton is shifting attention from this fundamental and popular feature of her (and Obama’s) approach and actually may be hurting the cause she cares so deeply about.

The cornerstone of both Clinton’s and Obama’s plans is the same: Employers must provide coverage to their workers or enroll them in a new, publicly overseen insurance pool. People in this pool could choose either a public plan modeled after Medicare or from regulated private plans. Both candidates have promised help for middle- and lower-income Americans, and both have said they will cut costs through administrative streamlining, prevention and quality improvement.

The Obama and Clinton plans, by contrast, get most of their mileage out of requiring that employers provide good coverage or help pay for publicly sponsored insurance. As a result, they can sign up most people — the 95% or so of nonelderly Americans who have some tie to the workforce — automatically at their place of work.

If enrollment is automatic for virtually all Americans, the big question is whether premiums can be kept low enough that people will want to keep the coverage (or, in the case of Clinton’s plan, won’t be forced to pay too much). This in turn depends on the generosity of federal subsidies. The federal price tag for Clinton’s plan is usually cited as $110 billion a year; for Obama’s plan, $50 billion to $65 billion. But the Clinton campaign estimates that her plan will save the federal government $56 billion, so she proposes almost the same amount of new federal spending as Obama does.

This syncs up with some of what I’ve been reading and hearing on the issue. On a slightly different note, during a recent episode of Bloggingheads Ezra Klein and I discussed the case against mandates from the left.

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