In (Very Reluctant) “Defense” of the Insurance Mandate

I have no interest in defending the mandate that individuals buy an insurance policy. I think it’s self-evident that coercing people to shell out their hard-earned cash to Big Insurance is a distinctly sucky thing.

So I won’t.

I do, however, want people to take a deep breath, and at least have a serious discussion of the policy without all the hand-wringing and hyperbole that have been flying around of late.

I used to labor under the naive delusion that liberals tended to be rationalists — sometimes too nerdy in their reliance on factual arguments — and conservatives were the ones who appealed to our basest emotions, our fears. Thankfully, the health-care debate’s set me straight on this.

Over at FireDogLake, they have a petition to kill the Senate bill. It has one of those list of ten reasons for doing so. The first:

Forces you to pay up to 8% of your income to private insurance corporations – whether you want to or not

When I read that, I had to think hard about what it is they were talking about — there’s certainly nothing in any bill I’ve read that says you have to pay 8 percent of your income to the insurance companies whether you want to or not.

It turns out to be some Death-Panel quality spin. What are they actually talking about? The Senate bill requires everyone to have insurance, or pay a penalty. But, if the cost of getting insured exceeded 8 percent of your income, then the fine would be waived.

The maximum penalty is 2 percent of adjusted income, which is probably around 1.4 percent or so of the average person’s gross pay. That money would not go to “private insurance corporations,” but would in fact defray the costs of the uninsured on our public health system.

Or consider the following from David Sirota’s column in USA Today:

Worst of all, it doesn’t actually extend “new coverage” to 30 million more Americans. Through the “individual mandate,” it simply makes people criminals if they don’t buy expensive insurance from the private corporations that helped create the health care crisis in the first place.

Again, I’m not defending the mandate so much as calling David out for pushing the idea that people who didn’t buy insurance would be “criminals” — that kind of rhetoric could appear in Townhall or The National Review or some wing-nut blog. Obama’s Gestapo will put you in a FEMA camp if you don’t carry health insurance!

The big problem as I see it is that lot of people are discussing this policy in isolation, free of context. And I think the most important bit of context is this: we’re not discussing a mandate alone — it comes with subsidies that make coverage much, much more affordable for working people. Consider some numbers for the Senate bill — again, much weaker than the House’s — that my colleague Daniela Perdomo brought to my attention the other day:

(click for larger version)

So we’re mandating that people carry coverage while decreasing the costs of that coverage by up to 90 percent for the working poor, and 20 percent for a family making $85K.

Another thing to keep in mind is that we can’t forbid insurers from denying coverage based on previous conditions — something that absolutely everyone (except for the insurers themselves) believes is necessary without mandating that people carry insurance. If we did, no healthy person would have a policy — why would you pay premiums if you could just buy a policy once you become ill?

Another piece of context that I think is missing is this: right now, if your family’s covered through an employer and you pay taxes, you are already paying approximately $1,000 dollars each and every year for the uninsured.

Individuals without coverage cost us all money, and that’s one reason why I don’t understand everyone getting quite so upset about asking them to pick up a small part of the tab. We hear a lot about how young, healthy people would be forced to buy insurance against their will. But while every 21 year-old thinks he or she is immortal, they’re wrong. Insurance is about risk, not likelihood, and young, healthy people get hit by buses, come down with illnesses and rack up huge bills they can’t afford in emergency rooms every day. And when they do, you and I end up paying for it.

Another thing I keep hearing is that the mandate will be so unpopular that it will provoke a revolt and return the Bushites to power forever. Taibbi, for example:

This individual mandate that’s going to force people to become customers of private health insurance companies, the Democrats are going to end up owning that policy and it’s going to be extremely unpopular and it’s going to be theirs for a generation. It’s going to be an albatross around the neck of this party.

I agree that the timing of these reforms — with benefits delayed several years only to keep budgetary costs down and assuage the Blue Dogs — is going to be a political nightmare in 2010 and 2012. But the idea that the mandate, in tandem with those subsidies, are going to be wildly unpopular is, as far as I can see, a dubious proposition at best.

There are something approaching 50 million people without health insurance in the U.S. Either you believe that a large number of those people are just rugged individualists who really hate the idea of being covered, or you believe that most want insurance but are priced out of the market. I think the latter is most often the case.

With that in mind, let’s consider for a moment who it is that would likely be outraged by this policy. I’ve come up with this: young and healthy conservatives who have a good middle-class job that doesn’t provide health benefits.

Anyone with half-way decent coverage from their employer or a public program like Medicare — still the majority of Americans — would be unaffected by the policy, and therefore pretty unlikely to revolt.

Those who earn less than 4 times the federal poverty line would see their premiums go down — quite dramatically on the lower end of the income ladder. Many will be able to afford at least half-way decent coverage for the first time. These folks are also unlikely to revolt.

Those who work free-lance, are self-employed, have a part-time job or a job without health insurance would, for the first time ever, be able to buy decent plans at a cost that an employee of a large corporation might expect to pay. These people would arguably get the best benefits out of the package, and will probably be pretty pleased at the end of the day.

If you’re a liberal-minded person in a family earning more than $85,000, then you probably aren’t going to be all that furious about seeing your tax bill rise by $800 per year in order to beef up the public health-care system.

So, that leaves us with young me-first conservatives who make over 400% of the poverty line, and work freelance or have a job without health-care. Screw ’em. They’re always pissed off anyway.

Finally, let me just say how annoying it is to hear people rant about the billions that will end up in the pockets of the insurance companies without even acknowledging that those dollars would be covering 31 million people who would otherwise lack it in 2019. Perhaps we might keep in mind that having health insurance is a good thing — the insured are more likely to get preventive care, more likely to have dangerous conditions diagnosed early — when they’re more readily treated — and less likely to die.

You may well believe that there’s this massive population in the U.S. who can afford coverage but go without simply because they like the insecurity of knowing that they’re screwed if they get sick, but I think that’s the worst kind of bullshit.

Equally obvious is that this is a rather convoluted way to get to a not-quite-but-almost universal health-care system. But in the context of the approach that’s on the table right now, it’s at least arguably a necessary evil. Maybe it isn’t, but it’d be nice to have that discussion without the kind of demagoguery that we’ve come to expect from the right.