The Mandate Debate

Tuesday, March 4, 2008

THE QUESTION of whether individuals should be required or simply encouraged to obtain health insurance sounds like a minor distinction. But the disagreement between Sens. Hillary Rodham Clinton and Barack Obama over an individual mandate (she wants one, he doesn't) is worth examining. It represents the central policy difference between two candidates who agree on most other things, and the current argument has implications for health-care debates long after the nomination battle is concluded.

The Clinton and Obama health-care plans have more similarities than differences. But where Mr. Obama would require only that parents obtain coverage for their children, Ms. Clinton would impose that mandate on everyone. The argument for such a requirement is that, without it, too many people, especially those who are younger and healthier, will go without coverage, knowing that they can always get insurance down the road. This would drive up health-care costs by shifting costs incurred by these free-riders to those with insurance, and by depriving insurance companies of premiums paid by the healthiest beneficiaries. Ms. Clinton asserts that without the individual mandate, Mr. Obama's plan would end up leaving out 15 million Americans, about one-third of those currently uninsured. Mr. Obama says the differential would be far smaller; that he would consider an individual mandate if the numbers left uninsured turned out to be too large; and that imposing a mandate at the outset is unwise because enough people will purchase insurance voluntarily if costs can be brought down.

Although we find the arguments for the individual mandate more persuasive, this is an issue on which reasonable candidates can differ. The problem is that neither of the Democratic candidates is being particularly reasonable in campaign rhetoric.

Ms. Clinton accuses Mr. Obama of not being for universal coverage; this is unfair since he has asserted, unlike John McCain, that universal coverage is his goal but that he disagrees with Ms. Clinton about the best way to get there. Mr. Obama asserts that "Hillary's health-care plan forces everyone to buy insurance, even if you can't afford it . . . and you pay a penalty if you don't." This is even more unfair. Ms. Clinton has given Mr. Obama an opening by being deliberately squishy on key details, such as enforcement. But the Clinton plan envisions limits, albeit unspecified, on how much of their income people can be required to pay for insurance.

There are legitimate questions about both the Clinton and Obama plans: in particular whether they make unrealistically low assumptions about the ultimate price tag (Ms. Clinton puts hers at $110 billion annually; Mr. Obama says his will cost $50 billion to $65 billion) and unrealistically high assumptions about how much they can save by bringing costs under control (Ms. Clinton credits her plan with $56 billion; Mr. Obama claims an extremely optimistic $120 billion.) The Democratic candidates' time would be better spent explaining how their visions are achievable, not taking potshots at each other.

Other editorials in the Ideas Primary series can be found here.

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