Unfair and Unbalanced Wonkery on Mandates

After California Gov. Arnold Schwarzenegger's health insurance plan went down in flames earlier this week, I made it a point to listen in to the Kaiser Family Foundation online forum yesterday discussing the role of individual mandates in guaranteeing health insurance for all. The failing Massachusetts plan has a mandate, as did the California plan. It was the number one reason why liberal legislators in the nation's most liberal state turned thumbs down on the proposal, claiming it would penalize low- and moderate-income Californians by putting a gun to their heads to buy insurance plans they couldn't afford.

Mandates were also a central issue in last night's Democratic Party debate, with Sen. Hillary Clinton backing them and Sen. Barack Obama opposed. It was one of the few points of contention in an otherwise cordial faceoff.

For the record: I'm opposed to mandates for two reasons. First and foremost, they're bad politics. Americans don't like to be told to do anything. They especially don't like unfunded mandates.

That leads to point two. Without sufficient taxes on businesses that don't provide insurance to their employees and/or significant savings from health care cost control (not likely given the opposition of insurance companies, drug companies, hospitals, doctors, and other providers in the system), mandates will result in inadequate plans for the uninsured -- catastrophic plans that still leave the newly insured at the emergency room door for basic care and without preventive services. Higher taxes are a prescription for political failure. Lousy plans maintain the status quo in public health. Some choice.

Clinton's plan does have one element in it that might make her mandate palatable. She would create a public sector default plan for the uninsured if they can't find adequate insurance in the private marketplace. But the new national plan with a mandate would face the same conundrum as California: if you keep pay-or-play provision low to forestall opposition from small businesses, you have to supplement the new government plan with general funds, just as Medicare is now subsidized with general funds. That's the only way to keep the co-pay for individuals mandated to buy insurance affordable while still providing decent insurance. And for the lower middle-income families who are too rich to qualify for subsidies but too poor to afford unsubsidized insurance, that's crucial.

This new plan wouldn't be "Medicare for all," sometimes known as single-payer. But it would establish the government as the default insurer and one option for the uninsured who cannot afford the new plans being offered individuals in the private market.

Let's be clear about what it is not: It is not socialized medicine, where the government provides health care. The government doesn't provide health care for the nation's 43 million Medicare beneficiaries. Most of them choose their own doctors, who remain in private practice, and go to private or public hospitals. The Center for Medicare and Medicaid Services, which runs Medicare, negotiates some prices for these services (alas, not drugs) and sets reimbursement schedules for providers, but it remains a distinctly private sector affair. The government pays, and our mixed system of private and public health care providers supplies.

I lay this out at some length because the Republicans this fall are likely to attack the Democratic plan as "socialized medicine." They want to give individuals tax breaks and send them on their own into the dysfunctional individual insurance market, where high-cost or high-deductible plans routinely discriminate against those with pre-existing conditions. But rhetorically, they will be offering "individual choice" versus what they will call "socialized medicine." If the Democrats' eventual nominee includes a mandate and/or the government default option in their plan, it will be pointed to as evidence that he or she backs "socialized medicine."

In an America that does not understand the complexities of the health care system and will not be given the information needed to vote intelligibly on the issues, that's a debate that the Republicans can easily win, especially if it supplemented with a mass advertising campaign by the drug and insurance industries, which have the most to lose under the Democrats' proposals. It appeals to some of the most deeply ingrained aspects of the American character -- rugged individualism, choice and low taxes. That it's bad for your health is the can that gets kicked down the road.

That's why it's so important that the independent arbiters of the health care debate be very careful to correct inaccuracies when the media or health care wonks label the government default option or single-payer health insurance -- which isn't even on the table -- "socialized medicine." Yet in yesterday's Kaiser Family Foundation forum, two policy wonks -- Michael Gordon of the libertarian Cato Institute and Len Nichols of the centrist New America Foundation -- both referred to single-payer health care as a system that, to use Nichols' words, "turns physicians, clinicians into employees of the government."

I don't expect better from Gordon. But this was so fundamentally wrong that it is hard to believe that Nichols, who is one of the leading architects of the individual mandate movement, didn't know he was telling a lie. Perhaps he was upset that his handiwork in California had been shot down. Whatever.

The sad part is that the moderator of the discussion, Larry Levitt, did nothing to correct that lie. That's too bad. As the mandates contained in the Massachusetts and California plans collapse, the movement for universal coverage will need a full and frank discussion about other alternatives. The good folks at KFF can start the process by inviting the full range of opinions onto their panels, and only include those who accurately describe the options.

Posted by gooznews at February 1, 2008 05:41 PM