I’ve always been ambivalent about the Obama health care reform plan. It’s good—no imperative—to cover as many Americans as possible. But the creation of an individual mandate under the Commerce Clause seems to be causing a bit of a stir. I have no idea what the legal outcome will or should be, but this might have been avoided.
Mandating that every American be covered by health insurance creates an economically feasible way to take care of sick people. The law essentially requires insurance companies to take all comers, whatever pre-existing conditions they may have. Without an individual mandate, there would be no incentive to buy insurance until you get sick, something that could no longer be called “insurance”. By creating a risk pool that includes healthy people, insurance companies are protected from collecting premiums only on people who are spending every cent and more.
But “requiring” people to buy insurance seems to rankle many Americans’ sense of “freedom” (yes, I used scare quotes twice in one sentence—sue me). What people really mean by freedom is freedom to be free riders, to let others pay for their healthcare. This is what happens in a private system: everyone tries to maximize their profit and minimize their losses, as they should. But we cannot afford that.
When we lost the single-payer or public option in the health care negotiations, we made the individual mandate, er, mandatory. Both a single payer system (basically Medicare for all) and a public option (basically a safety valve on the private insurance system) would have made a Commerce Clause mandate irrelevant. The solution is to simply make everyone pay for medical care, one way or another. Create a health tax that supports everyone creating the largest risk pool. How that gets divided up—whether by private or public insurance—can be fought out.