The current controversy over past Republican support of an individual mandate needs some clarification. Many Republicans did indeed support this approach in the past. They proposed it as an alternative to what they saw as more onerous Democratic proposals for either single payer or an employer mandate.
There was an intense debate over the idea in conservative/libertarian circles and the libertarian perspective has won the argument. But this has been an honest and legitimate debate over an idea that had some merit but far more flaws. This is exactly the way public policy is supposed to proceed. No one should be ashamed of past support for the idea if they have learned from the process.
In our Myth Busters series we have gone from the early 1970s to the early 1990s — twenty years of catastrophic failure in public policy, at least in health policy. Every crazy idea was enacted into law, with large amounts of money appropriated, and the health system thrown into constant turmoil without any positive results whatsoever.
The social planners are nothing if not persistent, however. They concluded that the reason their previous efforts had failed was not because they were bad ideas, but that they were not comprehensive enough. If a bad idea fails on a small scale, the solution is, of course, to do the same thing on a gigantic, national scale.
In 1991, the Senate Democrats rolled out a proposal to require employers to either provide coverage or pay into a public program. This put Republicans on the defensive. They thought they, too, needed to “do something.” The Chicago Tribune at the time wrote:
While Republicans praised the Democrats for taking the lead on changing health care, they took issue with details of the plan.
Sen. Orrin Hatch (R-Utah), who has worked with Kennedy to develop many changes in health care, said the Democratic package contains “little or no flexibility for employers.”
Sen. John Chafee (R-R.I.) said Republicans hope to fashion a health-care reform package of their own in the next few weeks. Efforts to put together a bipartisan package fell apart several weeks ago, leaving each party on its own.
Republicans tend to be pro-business, so they didn’t like the idea of an employer mandate, but they didn’t like the idea of a public program, either. What to do? They came up with the idea of an individual mandate. This was widely supported by business groups who wanted the onus of a mandate taken off them. And if business likes it, then many Republicans will too.
It was given intellectual support by the Heritage Foundation, which thought the Federal Employees Health Benefits Program (FEHBP) was a model for how to organize the health insurance market.
Many libertarian groups vehemently disagreed with Heritage on this. John Goodman of NCPA, ED Crane of Cato, and I as then-CEO of the Council for Affordable Health Insurance (CAHI), all weighed in to urge Heritage to rethink its position.
Heritage had published a paper calling for the state of Maryland to enact such a mandate under the guise of “consumer choice.” But I pointed out that the idea required so much regulation that it would virtually eliminate choice. Once the government mandates coverage, it has to define what benefits will fulfill the mandate, then it has to subsidize the people who cannot afford to comply, then it has to raise taxes to pay for the subsidy, then it has to control the insurance companies to make sure they aren’t over charging for the mandated coverage. All of these steps had the support of Heritage at the time.
It is curious that using FEHBP as a model would lead to this result, since participation in FEHBP is not mandated. Federal employees remain free to get coverage elsewhere or to go without coverage at all.
More recently, Mitt Romney’s support for a mandate in Massachusetts was based on the fear that the Democrats in the legislature had the votes to enact a single payer system in the state. He (and Heritage) offered up the mandate as an alternative.
Other people liked the individual mandate as a way of getting employers out of the health insurance business. Some insurance groups simply liked the idea of making people buy what they were selling. Still others thought of it as a way of ensuring that people take “personal responsibility” for their actions. Some people thought a mandate would be good, but only under certain circumstances — like if it applied only to high deductible plans, say, or if people could opt-out by proving they could pay their own expenses.
None of these positions are irrational. One can understand the thinking behind them, even while believing they are profoundly wrong.
If anything, this all shows a level of intellectual vitality in conservative circles that is missing on the progressive side of the spectrum. Over time the argument has been largely won by those of us who oppose mandates, and we have been helped by the stark reality of Obama’s health care law. Suddenly it was not just an intellectual exercise but had become the law of the land.
But there are lessons to be learned here.
- Ideas have consequences. We shouldn’t support something unless we are willing to live with the results.
- If we believe in the ability of markets to fix problems, we should not short circuit that process just because we are impatient.
- Politics is not just a debating society. Politics leads to the enactment of laws and laws require certain actions.
- Business can be parochial. It doesn’t care about ideology or even economics. It just wants to make a profit. It will support government actions that it thinks will lead to greater profitability for itself even at the expense of liberty for others.
- Politicians like to have power and power is the ability to tell other people what to do. Very few politicians are able to resist exercising their power.
The big question for the policy community is, are we able to resist the temptation to “solve problems” by forcing people to do what we want them to do? Can we be humble enough to accept that people may make decisions for themselves that we think are misguided?
Ron Kessler provides more background on all this in a NewsMax article.