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The Logic of the Health Insurance Mandate

by Chip Brown, published

When I first read the arguments in favor of an individual health insurance mandate advanced by the conservative Republicans who originated the idea, I must admit that their rationale struck me as containing a certain indisputable logic.

Yes, you read that previous line correctly.  The health insurance mandate was not an idea that originated with President Obama, nor was it an idea that that came from some liberal Democratic think tank.  In 1989, The Heritage Foundation, a conservative think tank in Washington, D.C., proposed a plan for affordable health care for Americans which included a mandate requiring all households to purchase health insurance.  Its rationale: 1) “health care is the responsibility of individuals,” and 2) there is “an implicit contract between households and society, based on the notion that health insurance is not like other forms of insurance protection.”

To explain the second point, the Heritage posited this apt analogy:  If a man wrecks his Porsche and has not purchased insurance, we may feel badly for him, but society feels no obligation to fix his car.  By contrast, if a man has a heart attack on the street, “Americans will care for him whether or not he has health insurance…even if it means more prudent citizens end up paying his tab.”  This may be a characteristic of American society that some object to, but that act of “charity” (otherwise referred to as free riding or cost shifting) is the status quo and its cost is paid by others.  There are a couple of solutions to the status quo: 1) stop extending that charity to the uninsured and end the free riding/cost shifting, or 2) require everyone to have health insurance to cover their inevitable entrance into the health care market, often times with critical and expensive needs.

In the case of this first solution, we would have to adopt the same hard-line attitude toward the man without health insurance as we display toward the man without auto insurance.

Society would say to the uninsured, “You made a choice, and choices have consequences which are now exclusively yours to bear.”  There was a time when I thought that sort of hard-line in medical emergencies was implausible as a national policy, but during the debate over the health care law, I sensed some degree of sentiment in this country that the hard line should be national policy—to summarily solve this aspect of the health care dilemma by leaving those who do not have health insurance to their own devices and presumably turning away all who seek treatment but do not have insurance.

The Heritage Foundation has now rejected its original position and opposes a mandate, but not before the Obama Administration cited the arguments from Heritage in its legal brief in support of the mandate, so Heritage filed an amicus brief rejecting its earlier position and siding with those who sought to have the mandate declared unconstitutional.

Advocacy for the individual health insurance mandate did not begin and end in 1989, only to be resurrected in 2010 by the Affordable Care Act.  In 1993, Senate Republicans introduced two health care bills containing the individual mandate. S. 1743 had 25 Republican co-sponsors, one of whom was Strom Thurmond, and it required employers to withhold health insurance premiums from an employee’s wages and remit the same to the employee’s chosen insurer. S. 1770, with 20 Republican co-sponsors, required each citizen to be covered under a qualified health plan.  Five of the Republicans whose names were on one or more of these individual mandate bills voted in 2010 against the mandate they supported 17 years earlier.

The idea that individuals should accept personal responsibility and cover their own health care costs has merit.  Health insurance really is different from other forms of insurance.  If the auto owner is imprudent, we say, “tough” without a modicum of compunction.  If we are not willing to take that hard line position with respect to health care, then we at least ought to require individuals to purchase health insurance.  The ideological fervor passing for debate on this issue may gratify some political base, but it is not a policy response to a serious and costly problem, nor will it yield one.

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