Clinton, Obama, and Health Insurance Mandates

As a centerpiece of her now-uphill battle for the Democratic presidential nomination, Hillary Clinton continues to attack Barack Obama because his healthcare plan does not call for an individual insurance mandate -- that is, a requirement that all Americans purchase a health insurance policy -- whereas her proposal, like the recently-scuttled Schwarzenegger-Nunez bill in California, includes such a mandate.

Whether the government should require everyone to purchase health insurance is a difficult issue about which reasonable people may differ. (Full disclosure: I am an unpaid member of a health care policy advisory committee for the Obama campaign, but I personally favor individual mandates as part of comprehensive health care system reform). But the sound argument to be made in favor of mandates is very different from the one reiterated daily by Clinton. As a result, her criticisms of Obama on this point are wrongheaded and disingenuous. Let me explain:

Clinton alleges that, simply because it includes a mandate, her plan would lead to universal health insurance while Obama's would not. This is not true. Obama would institute health insurance market reforms and subsidize health insurance policies for the poor, making insurance more affordable, but he wouldn't require adults to purchase insurance, at least at first. (He is open to mandates down the road if, after the reforms and subsidies reduce costs, a large number of healthy "free riders" still do not buy coverage). Clinton wants to require all Americans to purchase health insurance, but she refuses to describe how she would enforce such a requirement. Just as many drivers get behind the wheel of a car without coverage in spite of auto insurance mandates -- 25 percent of Californians, according to estimates -- many Americans simply would ignore a health insurance requirement. Massachusetts mandates that individuals buy health insurance and even threatens fines if they do not, but 20% of that state’s citizens still remain uninsured.

Mandates would reduce the number of uninsured Americans significantly only if accompanied by the strict enforcement of a severe penalty, such as garnishing the wages of anyone who fails to submit proof of insurance with their income tax return. Clinton has refused to propose a penalty and enforcement structure for the mandate that she trumpets so loudly, and she has dodged the question of whether she would exempt the poor from the requirement. This makes her call for mandates meaningless rhetoric, and the claim that her plan would cover everyone false.

What makes Clinton's criticism of Obama really off the mark, though, is that she is trying to market mandates as a benefit for the large number of currently or potentially uninsured Americans, when mandates actually are a concession to constituencies that otherwise might favor the status quo against attempts to make insurance more affordable. Auto insurance mandates are good for the people who might be hit by an uninsured motorist, but they are hardly welcomed by the uninsured who feel, rightly or wrongly, that they can't afford coverage. Similarly, health insurance mandates are good for people with insurance, employers who would be forced to pay into an insurance pool, and private insurers who would face greater regulation under a reform plan, because expensive subsidies that would be required to help the "sick" uninsured to purchase coverage would be at least partially offset by requiring the "healthy" uninsured to contribute their fair share to the system. But telling someone without insurance that the government will force him to buy it at whatever price the market charges is unlikely to convince him that his problem is solved.

To see why Clinton's argument is nonsensical, consider that the country could achieve nearly universal health insurance immediately simply by enacting an individual mandate coupled with a truly draconian penalty for non-compliance. But so what? This would be good for Blue Cross, Health Net, and Aetna, but the worried middle class wouldn’t sleep any better at night knowing the government was going to force it to buy unaffordable insurance than knowing that it might have to go without unaffordable insurance. Clinton understands this, of course, which is why she refuses to discuss penalties or enforcement.

Clinton could reasonably argue that, as president, she would need to accept an individual mandate in order to win Congressional backing for market reforms and subsidies that would truly help the uninsured. Instead, she chooses to claim that mandates are themselves the goal, because doing so allows her to falsely charge that Obama is less committed than she is to the real goal of making affordable health insurance available to all. Her choice of tactics can be rooted only in a cynical belief that her attacks can succeed because the issue is just too complicated for most voters to understand.