Tuesday, September 23rd, 2014

Switching sides on the individual mandate

The Supreme Court announced its ruling on the health care law on Thursday.
The Supreme Court announced its ruling on the health care law on Thursday.

What do you think of the individual mandate?

It’s the critical piece of the 2010 health care law that requires every American, starting in 2014, to have health insurance.

As the U.S. Supreme Court prepares to hear oral arguments on its constitutionality this week, the left and the right are powering up to defend it or savage it. The justices have taken the unusual step of arranging for three days of oral argument, and protests on both sides are planned for the Supreme Court steps.

Defenders say that without the mandate — the least popular part of health reform — it’s impossible to require insurers to cover people regardless of pre-existing conditions — a popular part of health reform. Detractors say the mandate is an unconstitutional infringement of personal liberty and an unprecedented expansion of federal power.

Think carefully, though, in making up your own mind about the mandate, particularly if you want to judge the policy on its merits. If you look to political leaders for insight, you’ll find major-league flip-flopping on both sides.

Against the mandate? It "forces everyone to buy insurance, even if you can’t afford it, and you pay a penalty if you don’t. ...  It’s not that people don’t want health care; it’s that they can’t afford it." That was a campaign ad from candidate Barack Obama, back in 2008. He now supports the law.

For the mandate? People without insurance "want to buy a second house or a better car or go on vacation, then you and I and everybody else ends up picking up for them." That was Newt Gingrich in May 2011. He now opposes the mandate.

Mitt Romney, meanwhile, is having to answer questions about the state law he signed in 2006 as governor of Massachusetts, which included a mandate. He now says the mandate was right for Massachusetts, but not for the rest of the country.

When Republicans supported the mandate

Once upon a time, the individual mandate was the preferred health care policy of many Republicans.

The year was 1993. President Bill Clinton had proposed a complicated health bill, championed by First Lady Hillary Clinton, to insure every American through regional "health alliances." The plan required employers to pay for insurance, and it closely regulated insurers and health care providers through cost controls and purchasing groups.

In response, a group of Senate Republicans introduced their own plan, inspired by ideas from conservative think tanks in Washington like the Heritage Foundation. Their plan got rid of the Clintons’ employer mandate, and put the burden on individuals to have insurance — the individual mandate. The plan, one of several Republican alternatives, also created a universal tax deduction for health insurance and gave the poor vouchers to buy policies.

While the Republican plan of 1993 isn’t exactly like the Obama law of 2010, it is strikingly similar.

So what’s changed?

Here’s how Gingrich explained it at a December 2011 debate.

"In 1993, in fighting HillaryCare, virtually every conservative saw the mandate as a less dangerous future than what Hillary was trying to do. The Heritage Foundation was a major advocate of it. After HillaryCare disappeared, it became more and more obvious that mandates have all sorts of problems built into them."

The 2010 law has some striking similarities to the Republican proposal, including voucher-like credits for people to buy insurance on competitive insurance exchanges.

But the 2010 law was passed almost entirely with Democratic votes. Not one Republican voted for the law’s final passage.

When Democrats didn’t support it

On the Democratic side of the aisle, the individual mandate became preferred policy during the primary battles of 2008. John Edwards, the former senator from North Carolina, was the first Democrat to come out with a health care plan. Edwards said for a plan to be truly universal, it had to include a mechanism so that everyone was covered. The individual mandate did that, and it was part of the Edwards plan. When Hillary Clinton released her plan, it too had an individual mandate.

Obama’s plan didn’t. And when the candidates started debating the merits of their proposals, Obama leaned into the difference, releasing ads attacking the mandate as punitive. His aides suggested a mandate would be unenforceable in practice.

The liberal base wasn’t happy. New York Times columnist Paul Krugman penned several columns castigating Obama, saying the candidate was "echoing right-wing talking points" and taking "cheap shots."

Six months after taking office, Obama changed his tune on the mandate. In an interview with CBS News, Obama said he supported a mandate as long as there was a hardship exemption. In a speech to Congress later that year, Obama said that the mandate was necessary to make the rest of the health care law work — just as his health care critics had suggested during the campaign.

"Unless everybody does their part, many of the insurance reforms we seek — especially requiring insurance companies to cover pre-existing conditions — just can’t be achieved," Obama said. "That’s why under my plan, individuals will be required to carry basic health insurance — just as most states require you to carry auto insurance."

What the mandate means for you

Who is affected by the mandate? Some polls show Americans aren’t sure what an individual mandate is or whether it affects them.

A few general guidelines: If you get insurance from your employer, you more than likely won’t have to buy new insurance or be affected by the mandate. If you get Medicare, you’re covered. If you’re very poor and qualify for Medicaid, you will also meet the mandate’s requirements.

So who wouldn’t already meet the mandate’s requirements?

Well, the uninsured, primarily. For people who buy insurance on their own, the mandate won’t allow high-deductible, lower cost plans that pay only for catastrophic illness. And some low-wage workers who get "mini-med" coverage through employers will likely have to buy more comprehensive policies. (Some current plans will be grandfathered in, but new plans won’t be allowed.)

The penalty starts small in 2014. It’s designed to be assessed on tax returns, so some people won’t even notice it until they file their taxes in 2015. But the penalty grows as the years go on.

To help people buy insurance, the law does a number of things. It expands Medicaid for the very poor, and it offers tax credits to people of modest incomes. The tax credits end at income levels that are above 400 percent of the poverty level. Right now, that would mean uninsured individuals who make more than $44,680 would have to buy their own insurance without assistance. The cut-off for a family of four would be $92,200.

There are also the hardship exemptions that Obama favored. People do not have to buy insurance if the only policies they can find exceed 8 percent of their household income.

As for enforcement, the law is relatively weak. People who don’t pay the tax penalty "shall not be subject to any criminal prosecution or penalty with respect to such failure," according to the law. That was to assuage concerns that someone could be jailed for not buying insurance. Under the law, that’s not possible. The Internal Revenue Service could withhold tax refunds for those who haven’t paid their penalty.

The Supreme Court to weigh in

A recent poll from the Pew Research Center showed people oppose the mandate by about 56 percent to 41 percent. Still, many Americans aren’t paying much attention to the law since its major provisions are still almost two years away from taking effect, pollsters say.

The argument that the law is unconstitutional is gaining ground among the public, though. About 72 percent of people say it’s not constitutional, according to a recent Gallup poll.

"The Republicans picked this as their tip-of-the-iceberg criticism of the law, and they repeat it over and over again. It has really stuck with people about it being unconstitutional," said Robert Blendon, a Harvard University professor who studies health care polling. "But people haven’t studied it, or know what the penalty would be, or many other details about it. It’s just too far away."

If the court strikes down the mandate, it’s not clear if the rest of the law will stand or fall. That question has been hotly debated in legal circles in the weeks leading up to the case. Even among the law’s supporters, there’s disagreement if the law can still function if the court finds the mandate unconstitutional.

Back in August, a voter at a town hall meeting told Obama he was concerned about what might happen to the law if the mandate was struck down. Obama repeated his argument that everyone should be responsible by buying their own insurance and that he believed it to be constitutional.

"If the Supreme Court follows existing precedent, existing law, it should be upheld without a problem," Obama said. "If the Supreme Court does not follow existing law and precedent, then we’ll have to manage that when it happens."