Doctors Explain the Flaws of Mandated Insurance
Sat Dec 15, 2007 at 10:36:20 AM PDT
David U. Himmelstein and Steffie Woodhandler, the two authors of the article, are also members of Physicians for a National Health Program, a group of doctors and researchers who support single-payer. Their argument here is that individual mandates are a Nixonian effort to sandbag single-payer by providing a flawed health insurance reform that has failed in the six states that have attempted it.
IN 1971, President Nixon sought to forestall single-payer national health insurance by proposing an alternative. He wanted to combine a mandate, which would require that employers cover their workers, with a Medicaid-like program for poor families, which all Americans would be able to join by paying sliding-scale premiums based on their income.
Obviously Nixon never got to implement this approach, though it should cause us to ask why any Democrat would attempt the same. Even if they aren't proposing it to forestall single-payer, that IS the actual effect of the plan.
But it's not just that Nixon came up with the idea. The real problem with using individual mandates is that the six states that have tried to mandate insurance have all witnessed its failure.
In 1988, Massachusetts became the first state to pass a version of Nixon’s employer mandate — and it added an individual mandate for students and the self-employed, much as Mrs. Clinton and Mr. Edwards (but not Mr. Obama) would do today. Michael Dukakis, then the state’s governor, announced that "Massachusetts will be the first state in the country to enact universal health insurance." But the mandate was never fully put into effect. In 1988, 494,000 people were uninsured in Massachusetts. The number had increased to 657,000 by 2006.
Oregon, in 1989, combined an employer mandate with an expansion of Medicaid and the rationing of expensive care. When the federal government granted the waivers needed to carry out the program, Gov. Barbara Roberts said, "Today our dreams of providing effective and affordable health care to all Oregonians have come true." The number of uninsured Oregonians did not budge.
The authors go on to describe how the same phenomenon took place in Minnesota, Vermont, Tennessee, and Washington State in the 1990s - a mandate plan was passed and failed to stop the increase in the number of uninsured Americans. They close by returning to MA, which apparently hasn't learned from its past mistakes:
As governor, Mitt Romney tweaked the Nixon formula in 2006 when he helped devise a second round of Massachusetts health care reform: employers in the state that do not offer health coverage face only paltry fines, but fines on uninsured individuals will escalate to about $2,000 in 2008. On signing the bill, Mr. Romney declared, "Every uninsured citizen in Massachusetts will soon have affordable health insurance." Yet even under threat of fines, only 7 percent of the 244,000 uninsured people in the state who are required to buy unsubsidized coverage had signed up by Dec. 1. Few can afford the sky-high premiums.
Only 7% of uninsured MA residents have actually been helped by this. Some defenders of mandate plans point to public subsidies as the answer. I have consistently argued that those plans will face a funding shortfall and I have not yet had anyone counter that criticism (usually they move the goalposts at that point and say "well why don't you want us to do something?"). MA shows that this is a very real issue:
Each of these reform efforts promised cost savings, but none included real cost controls. As the cost of health care soared, legislators backed off from enforcing the mandates or from financing new coverage for the poor. Just last month, Massachusetts projected that its costs for subsidized coverage may run $147 million over budget.
As government wastes money subsidizing private profits, there is less money available to properly fund public subsidies and public insurance coverage. And in MA, right now, the state is governed by Democrats, from the state house to Deval Patrick. Why is there a deficit?
Wouldn't it make sense for us to provide funding for expansion of public programs alone, without the poison pill of health insurance mandates? S-CHIP was a very popular reform, it got 2/3 in the Senate and nearly that in the House. We could greatly expand free care for Americans in need without repeating past mistakes, without shackling millions of Americans to insurance companies that commit murder by spreadsheet as a core business practice.
bonddad has explained why market-based health insurance does not work. Here in CA the state insurance commissioner is suing Blue Shield for "thousands of violations of state law" in their dropping of sick people from coverage. These are the people we want to force Americans to give their money to?
The authors close their op-ed by explaining the flaws of mandates:
The "mandate model" for reform rests on impeccable political logic: avoid challenging insurance firms’ stranglehold on health care. But it is economic nonsense. The reliance on private insurers makes universal coverage unaffordable.
I would argue that in fact, the political logic is flawed as well. When Washington State passed its plan in 1993, public reaction was so negative that voters in that reliably blue state gave the GOP a massive victory in 1994, taking over the state legislature and reducing the number of Dems in Congress from WA from seven to two. It took Democrats nearly 10 years to recover.
Bad plans come with enormous political costs. Do we really want to jeopardize the 2010 and 2012 elections with a health care reform that has failed everywhere it's been tried? Or should we instead demand better leadership from our presidential candidates? If they're as good as we're told, wouldn't they be willing and able to find a way to make a better plan politically successful?
