Remember when Democrats and progressive activists warned that ending the Affordable Care Act’s individual mandate would “deprive” 13 million Americans of their health coverage? Based on a Congressional Budget Office estimate, this claim helped Democrats defeat a Republican repeal-and-replace bill as recently as 2017.
It was a patently ridiculous claim from the outset. For the vast majority of those included in the estimate, the mandate was said to be forcing them to buy expensive health plans they didn’t want. Ending the mandate would have allowed them to stop buying such plans. They’d have been liberated, not “deprived.”
Aside from the faulty description, this widespread claim had a more basic flaw: the number was wildly exaggerated. By mid-2018, the estimate had fallen from 13 million affected people to 8 million.
Now, a new estimate from the Center for Medicare and Medicaid Services* has lowered the number again: 2.5 million Americans will decide to go without federally approved health insurance in the absence of the mandate, which was ultimately repealed as part of federal tax reform.
The notion that the federal government can and should attempt to compel Americans to buy federally approved health plans was both an unnecessary detour on the road to reform and a grotesque assault on our system of limited, constitutional government. It famously led to a lawsuit in which conservatives actually proved their case before the U.S. Supreme Court — the constitution gives Congress no power to compel the purchase of a private good — only to see Chief Justice John Roberts retroactively and disingenuously rewrite the Affordable Care Act to convert an unconstitutional penalty into a constitutional tax.
Want to understand the underlying rationale of the mandate, and why that rationale was faulty? You need only go back to debates between Hillary Clinton and Barack Obama during the 2008 Democratic primaries.
Clinton argued that unless federal health reform included an individual mandate, 15 million Americans would go uncovered. Obama disagreed, arguing that using federal subsidies to help those excluded from coverage by low incomes or preexisting conditions would be sufficient. Clinton’s plan “forces everyone to buy insurance, even if you can’t afford it, and you pay a penalty if you don’t,” Obama warned.
He flip-flopped later, as we know. But Obama was right the first time. For most ACA enrollees, the federal subsidies are so generous that they need no mandate to buy plans. As for higher-income individuals who consume little medical care, the mandate was never going to be enough to corral them into overly expensive exchange policies.
If you look close enough, you’ll see that most lawmakers and policy analysts across the spectrum already agree about subsidizing poor and sick patients. They differ about the specific means to do so, but most think it inefficient and unfair to foist a disproportionate share of the cost of those subsidies onto the relatively small number of consumers who make up the individual and small-group markets for health insurance. Sliding-scale tax credits and high-risk pools, subsidized by general revenue, have been common elements of Republican health proposals for decades.
Now that the individual mandate is essentially gone, we should be embracing reforms that work with our traditions of individual freedom and federalism rather than against them. One promising idea is to let individuals and small employers band together as private associations to purchase the plans they want at an affordable price.
Now that Trump administration has removed Washington’s regulatory roadblocks, states can proceed with explicit authorization to broaden and deepen private markets for such association health plans. Here in North Carolina, Sen. Dan Bishop, R-Mecklenburg, Sen. Joyce Krawiec, R-Forsyth, and Sen. Chuck Edwards, R-Henderson, are the primary sponsors of the Small Business Healthcare Act (Senate Bill 86), which would do just that.
Even as leading Democrats now go beyond ObamaCare to talk of eliminating private plans together, conservatives should seize the opportunity to move the health care debate in a more productive direction. They were right to oppose the individual mandate. Now, the right should propose alternatives.
John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.
* Originally I attributed this latest projection to CBO. It was actually from the Center for Medicare and Medicaid Services. Sorry about that.