Just as in most policy areas, Clinton and Obama's health plans are much more similar than they are different. But there is a real difference, and that difference will affect people's lives. That difference is an argument about the fundamental beliefs of the Democratic Party.
This diary will explore my thoughts on that difference in three parts.
In the first section, I'll explain the three reasons why we need mandates in the absence of a single payer program.
- Broadening the risk pool.
- Preventing free riders.
- Elevating public health.
In the second section, I'll explain how Obama's argument against mandates is more than just flawed. His public reasons for opposing a mandate are contradictory and false.
Finally, I will explain why Obama's rhetoric and policy bother me so much. I'll detail how I've seen his arguments in my personal experiences fighting for health coverage, and how they were coming from the other side.
Health care is a right, and the only way that right can be secured is through universal coverage. This is a fundamental aspect of my Democratic Party, and I hope yours too.
The Need for Mandates
1. Broadening the Risk Pool
Obama and Clinton both claim their health plans will make quality coverage affordable for everyone. If this is accomplished, the only people who will not buy health insurance are the people who decide buying health coverage is a poor investment. This group will be much healthier than the group who will choose to buy insurance, as the sick will always see the need for quality, affordable health care.
Insurance is based on pooling risk in a broad manner. Without a mandate, the healthiest members of society will not be in the risk pool. The pool thus contains a disproportionate share of medically needy individuals, spreads the risk over fewer and riskier people, and makes health care more expensive for those who are in the pool.
Clinton's plan mandates that everyone join the pool, bringing the healthy and less-than-healthy together to pool their risks. Spreading the risk over both people who use medical services more often )or costlier medical services) with those who will likely use fewer medical services makes coverage more affordable overall.
Here's a quick breakdown, if that doesn't makes sense:
Person A: Middle aged woman with cervical cancer.
Person B: Man in his mid-30s with a history of knee problems.
Person C: Man in his mid-20s with no known health problems.
If the risk pool contains only A and B, as it likely would under Obama's plan, the price of coverage will be high. Both of those people will likely require expensive care. If C is brought into the risk pool, coverage for A and B becomes much more affordable. The economic risk of insuring A and B is much greater than the risk of insuring all three people.
By mandating insurance, coverage becomes more affordable for the people who need care the most (A and B).
2. Preventing Free Riders
Obama and Clinton both have strong measures in their plans to prevent insurers from discriminating against people who aren't healthy. If someone with a health problem tries to get insurance today, at least one of three things happen:
A) No insurance is offered
B) The pre-existing health problem is excluded from coverage, making the coverage essentially useless.
C) The offer is extremely expensive insurance after underwriting criteria are applied.
Under Obama and Clinton's plans, insurers will not be able to do any of this. They have to offer insurance to everyone, they cannot exclude pre-existing conditions, and they cannot underwrite on the sick. These are all great changes.
However, without mandating coverage, a "free rider" problem is created. Under Obama's plan, healthy people can choose not to buy health insurance until they experience a medical problem. At that point, they can simply buy into a plan with no added cost concerning their sickness.
In essence, they can free ride on the system while they're healthy, and they can just join up when they get sick. They won't be added to the pool until they're high risk, themselves. This increases costs for all.
At one point, Obama suggested he might create a penalty for people who attempt this scheme. There are two problems with this. First, Obama hasn't actually proposed it. Second, it's the same basic problem as underwriting--people will be charged more for coverage if they're sick, which makes it less likely that the people who need care the most will be able to afford it.
Could you imagine if we had a Medicare or Social Security system that allowed free riders? The healthy and wealthy could opt out of the system until something bad happened to their health or their wealth. At that point, they could buy into the system at the last minute and receive all of the same benefits as the people who have been buying into the system since Day 1.
3. Elevating Public Health
While the first two points are about how the people who opt out of the system are screwing the people who opt in, my final point is that people who opt out of the system are also screwing themselves.
Simply put, people are much less likely to go to the doctor for preventive care and general check-ups if they have to pay out of pocket for the doctor's visit. Going all the way back to the classic RAND study on health insurance usage, this realization has been universally accepted in health policy.
The people who opt out of the system under Obama's plan will be less likely to go to the doctor than they would be if they were covered. Two related effects will flow from this, both of which would be avoided under the Clinton plan.
First, the people who opt out will have worse health outcomes. That's obviously bad for them and their families and their communities. Second, failure to receive preventive care means much higher health care costs going forward. An ounce of prevention really is worth a pound of cure.
OBAMA'S CONTRADICTORY ARGUMENTS
Obama's defense of his lack of mandates and attack on Clinton for having mandates make no sense. Let's start with his defense.
Obama claims that he will make health coverage affordable for everyone. He claims that no one would ever refuse to purchase health insurance if it's affordable. Then what's his problem with having a mandate in his plan? If he thinks every American will voluntarily sign up, why would he raise so much vitriol about mandates?
His attack suffers from the same logical disconnect. He claims Clinton's plan will force people to buy coverage they cannot afford. He claims his own plan will make coverage affordable, but he never explains why Clinton's wouldn't. He never explains this, of course, because it's simply not true.
There is absolutely no reason to think Obama's plan would make coverage more affordable than Clinton's plan. In fact, the opposite is true. Bringing healthy people into the system through mandates will make coverage more affordable for the people who are sick.
Obama sets up a false dichotomy between affordability and mandated coverage. In reality, these two are not mutually exclusive. We can make coverage affordable, as Clinton's plan does, while mandating coverage at the same time. There's no contradiction here.
A PERSONAL EXPERIENCE
Obama's attacks on universal coverage strike a nerve with me because of the work I've done and the places I've heard his argument coming from.
A few years ago, I was working for a progressive nonprofit in Washington DC that was part of a coalition to stop a terrible health care bill introduced by Senator Enzi. The bill, modeled after Association Health Plans but oh-so-cleverly renamed Small Business Health Plans, was designed to strip away virtually all state mandated consumer protections in the health insurance market.
Over the past 25 years, state legislatures around the country had passed bills mandating that certain benefits and services be included in all insurance sold in the state. These benefits ranged from cervical cancer and mammography screening to alcoholism treatment to well-child care. The point of the mandates is that if insurers were not required to include them, they could charge exorbitant rates for the people who wanted them included in their individual insurance. Health insurance would be unaffordable for the people who need it most.
Enzi's argument was that we should not be forcing people to buy health coverage they cannot afford. If healthy people want to buy a bare bones package that doesn't include diabetes care, they should be able to.
The essence of Enzi's argument is very much the same as Obama's argument against mandates. They're misleading, dispassionate, and in opposition to the ideals of the Democratic Party. Health care is a right, not a privilege. The only way to secure that right is to make it truly universal.
In case anyone's wondering, we defeated Enzi's bill in the Republican controlled HELP Committee. It was long and hard fight, which is why it pains me so much to have to fight it within our own party. Despite having the support of unions, consumer groups, and most state Insurance Commissioners, our outlook for success was looking grim. But thanks to a strategy hammered out between us and Senator Ted Kennedy (the ranking Democrat on the HELP Committee), we managed to prevent the bill from moving out of committee.
The winning strategy? Forcing Mike Dewine, who was desperately trying to recreate himself as a moderate to hold onto his Ohio Senate seat, to take vote after vote on amendments against cancer, diabetes, asthma, and other benefits and screenings. He, and other moderate Republicans, finally had enough, and the bill died.
When I see Obama's ads, it makes me angry. I think of Michael Enzi. I think of Harry and Louise. I think of AHIP. I think of the 50 million Americans who do not have health coverage. I think of the additional 50 million Americans who are underinsured.
What does this make you think about? Does it make you angry?
UPDATE: Thank you to all who have recommended. This is an incredibly important issue, and one I care deeply about. I'm honored that it's my first diary to make the list.
UPDATE 2: I accidentally used a portion of Obama's mailer instead of the whole thing. Hat tip to vejoaronda for pointing that out to me. It's been fixed.