Richard Eskow: Hillary Clinton, John Edwards, and Barack Obama have each presented detailed proposals for health reform. The Clinton and Edwards plans include health mandates, which require Americans to obtain health care coverage or face (unspecified) sanctions. The Obama plan does not include mandates.
Health mandates are popular among many Democratic-leaning health policy analysts. The Clinton campaign has been going after Obama aggressively on this issue. They've said that the absence of mandates is a basic flaw in Obama's plan; suggested a cynical political calculus behind Obama's position said that his position feeds a Republican narrative; and took the position that Obama's plan is politically vulnerable while theirs (and Edwards') is a political plus in the general election.
(The preceding positions were echoed today by Paul Krugman - see my response, "Why Paul Krugman Is Wrong...)
I don't support any Democratic candidate, but I do have strong opinions about health mandates. As a long-time healthcare policy analyst and health manager in the private sector, I disagree with Paul Krugman, Ezra Klein, Jacob Hacker, and others who support mandates. My differences are based on policy effectiveness, issues of fairness, and Democratic political strategy. I think mandates pose more problems than they solve, and that they could be a political loser for Democrats in the general election.
I've been engaged in a collegial debate with Klein, blogger/consultant Joe Paduda and others on this topic for some time (see, for example, here, here, here, and here). During an exchange with Klein over the last week it became apparent that, while I had reasons to support Obama's policy, it was unclear to me what his team's current thinking was on the topic.
The team published a rebuttal to Clinton's campaign late today. Earlier I spoke with David Cutler about mandates. Cutler is Professor of Applied Economics at Harvard, Obama's senior health advisor, and the principal architect of the Obama plan.
David Cutler: I'd like to start with a general comment.... Two possible reasons why people don't have health coverage are usually given. One is that the uninsured are gaming the system. The other is that they can't afford it and don't know where to get it. Most of the literature suggests that the explanation is mostly the latter. That means the single biggest thing we can do to help the uninsured is to make coverage affordable and accessible.
That's why all the Democratic plans focus on removing excessive profits where they exist, improving information technology, and so forth. All the plans do those things, although I think the Obama plan does the most.
The mandate argument is: You must buy something %u2013 but I'm not going to tell you what it is, how much it will cost, or where you're going to get it.
It comes down to this. You'll never get someone to buy something if it's not affordable and not accessible. People just don't do it.
Richard Eskow: That's an area where the Edwards campaign has taken the lead. They suggest automatic enrollment whenever an American intersects with the health care system or government services.
David Cutler: You can enroll them and then forcibly collect the premiums. That's one way to solve the problem. But it's not necessary to do that. A better approach is to do everything possible to make it affordable and available. When it is, almost everyone will have it."
Richard Eskow: There are a couple of concerns about that approach. One is the problem of "adverse selection." Sicker people %u2013 or people with a greater likelihood of becoming sick %u2013 will enroll. That will drive plan costs up, making it prohibitively expensive.
David Cutler: Let's look at the level of coverage you can get without a mandate. Our estimates, based on studies in the literature, is that we can get 98% or 99% coverage without a mandate for adults. There may be some small pockets of people who choose not to buy it.
Richard Eskow: What about those people?
David Cutler: If there are free riders, Obama is open to mandates. But what he is saying is %u2018Look, mandates seem like a panacea, but that's not where the hard work needs to be done.' Auto insurance is a mandate, too, and not everyone has that. You've got to prove to the public that you're willing to do the hard work.'
Richard Eskow: Would mandates be considered at that point?
David Cutler: He hasn't ruled anything out. It's a matter of priorities. The fact is, the policy differences on the mandate issue aren't that large at all. Sen. Obama believes they're an option down the road, if other approaches don't work.
Richard Eskow: And yet Sen. Clinton made another speech about mandates and universal coverage yesterday. And the Clinton had ( Clinton Campaign Manager) Patti Solis Doyle and (Policy Director) Neera Tanden talk about health care differences with reporters this morning. And Paul Krugman weighed in on the pro-mandate side of the debate, too.
David Cutler: I know the arguments, but look at the evidence. What really matters is: Can they afford the coverage?
Richard Eskow: Part of the debate involves political communications: Is the mandate issue a winner for Democrats in the general election, or a liability?
David Cutler: I don't get involved in the politics of it.
Richard Eskow: What about the concern %u2013 which I and others share %u2013 that insurance premiums are an inherently regressive form of 'taxation.' The state of Massachusetts has had to waive the mandate for 20% of the uninsured as a result. All the campaigns have been forced to create fairly complex subsidy structures in an attempt to offset that regressivity, but paying for some portion of health insurance out of general tax revenues %u2013 either for a public system or some type of voucher %u2013 would be less regressive. What about taxation as a funding mechanism?
David Cutler: That doesn't seem to be on the table now for any of the candidates.
Richard Eskow: Then the devil is in the details, isn't it? What would premiums costs? Who would get a subsidy, and for how much? Nobody is debating these issues with any specificity, and yet that's where %u2013 arguably %u2013 the real debate should take place.
David Cutler: That's why we're suggesting that we lower costs first. Otherwise, you're saying you want to force people to buy something, but we don't know how much it will cost or what you'll get in return.
Richard Eskow: There's been talk that a consensus is forming among policy analysts that 10% of income is the right number for total out-of-pocket health costs, including premiums, copays, and deductibles. But that's a very high number for lots of people.
David Cutler: Well, healthcare is 16% of the GDP now. Some of that cost is being borne through taxes already. So it depends what you want to count.
Richard Eskow: But 10% for whom? $4,000 for a family of four with income of $40,000 is a devastating figure. Whereas there are probably very few people in the top 2% of income who spend 10% on healthcare.
David Cutler: That's where the subsidy debate comes in, and is another reason to address the cost issue first.
Richard Eskow: Overall, Prof. Cutler had a clear and well-articulated response to many of the objections raised to the plan. Since he is not part of the campaign's communication strategy, I did not ask him about the Clinton campaign's accusation that Obama had been misleading in suggesting he had a universal coverage plan. He did make it clear that he feels a 98% enrollment level is possible without mandates, and that if that fails Obama will consider their use.
In my opinion, both the Clinton and Obama campaigns could have communicated their points more clearly - and with less heat. It was for this reason that I contacted Prof. Cutler. I have asked him for more background on that 98%-99% enrollment estimate. He says its an "internal calculation," and it seems quite high to me. I'll provide any further information as I receive it.