A mandate isn't mandatory
The Clinton-Obama debate over requiring individuals to buy insurance obscures more important discussions on universal healthcare.
By Jacob S. Hacker
February 26, 2008
As the primary fight between Hillary Rodham Clinton and Barack Obama reaches fever pitch, the domestic policy battle has boiled down to a single technical phrase: "individual mandate."
Clinton's healthcare plan includes such a mandate, requiring that everyone obtain health coverage. Obama's does not (though he does require that children get coverage). This difference, Clinton is insisting, is reason enough for anyone who wants universal coverage to support her. As Clinton argued in last Thursday's debate: "If you do not have a plan that starts out attempting to achieve universal healthcare, you will be nibbled to death, and we will be back here with more and more people uninsured and rising costs."
As a health policy expert, I feel the pull of this argument. I advised both Clinton and Obama on healthcare, and I've promoted a proposal resembling their basic approach that does include an individual mandate. In the context of a broad overhaul, I think an individual mandate is valuable, and I'm disappointed by some of Obama's attacks on the idea.
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.
So why has attention focused on the individual mandate? Partly because candidates and their allies search for differences. But also because of the media and political interest in the experience of Massachusetts, which implemented an individual mandate. In Massachusetts, however, the mandate was the core of the legislation. Employers are not required to provide good coverage, and those that don't offer insurance only have to pay a token fine. The problem was how to get people signed up outside of employment. Hence the emphasis on an individual requirement.
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.
Can affordable coverage really be provided with new federal spending of about $50 billion? Yes, if the candidates stick to their pledge of allowing public insurance to compete with private insurance to hold down costs. Recently, the Lewin Group, an independent consulting firm, examined my plan at the request of the Economic Policy Institute and concluded that it would cover everyone for $50 billion in new federal spending, with no increase in national healthcare spending overall.
Thus, the mandate melee obscures what are likely to be the most important features of Obama's and Clinton's plans: how they would enroll people, how they would ensure premiums stay low and how they would keep costs down. Instead, Clinton and Obama are arguing about one of the least salable aspects of reform: forcing people to buy coverage individually. And they're fighting over technical differences instead of taking on the starkly divergent GOP vision on healthcare.
So let's have a vigorous primary fight. But let's not make small differences appear larger than they are. Doing so misses the real issues, and perhaps the chance to finally solve the U.S. healthcare crisis.
Jacob S. Hacker, a professor of political science at Yale University and a fellow at the New America Foundation, is the author of "The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream."
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