Brian Beutler reports that Senator Claire McCaskill is exploring an alternative to the new healthcare law’s individual mandate. The open enrollment period would be similar to open enrollment periods people now face at their place of employment. Anyone who failed to enroll in healthcare during this period and then later decided to get coverage would be penalized once that window had closed.
Derek Thompson writes:
The bottom line is that without the mandate, health care reformers could have a hard time creating effective and humane incentives to get everybody insured.
The problem with Derek’s reasoning here is with the mandate itself. As it currently stands, the penalty for not enrolling in an exchange is fairly minimal to begin with by 2016 an individual will pay up to $700 for not purchasing insurance and a family could pay up to $2100 – still quite a lot less than actually getting coverage. Young invincibles have no more incentive to purchase healthcare because of a weak mandate than they do facing a fine after open-enrollment. Furthermore, his worst-case-scenario applies to both the mandate and the open-enrollment period. What kind of prosperous country turns away a sick single mother of four to make an economic point – whether they skipped open enrollment or paid the mandate fine instead of buying insurance? The same ethical dilemma is present in both scenarios.
Other ideas have been floated to replace the mandate, including automatic enrollment and revived interest in the public option. Actually many of these ideas could work together to create a system of incentives toward enrolling every American. Whether the current law will function without the mandate at all or any other mechanism is another question, but Mark Pauly – an economist in the Sr. Bush administration and the ‘father’ of the individual mandate – thinks it could.
Hopefully the mandate survives. Some of the best market systems of health insurance in the world are made possible only through the use of a mandate. The Netherlands, Germany, and Switzerland all have individual mandates to purchase health insurance, and each rely on competing health insurance companies to provide insurance to their citizenry. The alternative to this system is either fully socialized medicine (The UK) or single-payer (Canada) or some combination of HSA’s and single-payer (Singapore). None of these options are as market-friendly as the one Democrats recently passed. And the fact is, markets alone can’t ensure universal coverage, but market mechanisms can help create a better system of delivery. There’s a lot that’s wrong with the new healthcare bill. It doesn’t do nearly enough on the supply side to get prices down. But the mandate is hardly its most egregious part.
