3 – Why the individual mandate?
These days many conservatives dislike the use of a healthcare mandate to expand insurance coverage. But it wasn’t always this way.
In fact, the very idea of an individual healthcare mandate originated from the conservative think-tank The Heritage Foundation. But don’t take my word for it, read about it here.
Moreover, many prominent conservatives have supported the use of the individual healthcare mandate. Some noteworthy conservatives who have supported individual healthcare mandates are:
-President George H. W. Bush (source 1 and source 2)
-Speaker Newt Gingrich R-GA (source)
-Senator Orrin Hatch R-UT (source)
-Senator Charles Grassley R-Iowa (source)
-Senator Bob Bennett R-UT (source)
-Senator Christopher Bond R-Missouri (source)
-Senator John Chafee R-RI (source)
-Rep. Bill Thomas R-CA (source)
-And at least 16 other GOP Senators who have since retired from the Senate (source)
Actually, in 1993 when then-President Clinton was attempting to reform healthcare, Republicans who opposed Clinton’s idea of an employer mandate, supported the idea of an individual mandate. An individual mandate, the Republicans argued, would be a “free-market solution” to reform healthcare, part of a “social contract” that would help people take responsibility for themselves and avoid the immorality of freeloading off the government. Clinton’s plan, on the other hand, was seen as a “true government take-over” of healthcare, the worst form of the dreaded “socialized medicine.”
In fact, when Romney signed the Massachusetts Healthcare Law in 2006, it was touted by many healthcare experts, and media outlets as a “conservative answer” to the healthcare crisis.
My favorite quotation on how Romney’s plan was initially considered conservative, is given by renowned Harvard healthcare expert, Regina Herzlinger, in her new book Who Killed Healthcare? published in 2007. In her book, Herzlinger states:
“A bizarre 2006 photograph shows Senator Edward (Teddy) Kennedy (D-Massachusetts) uncomfortably smiling while standing in back of seated Republican MA Governor Mitt Romney as he signed the new healthcare legislation. Romney achieved what he wanted, consumer-driven healthcare solutions.”
Romney is occasionally asked by the more conservative/libertarian voters, why he used an individual mandate. Romney replies:
“The key factor that some of my libertarian friends forget is that today, everybody who doesn’t have insurance is getting free coverage from the government. And the question is, do we want people to pay what they can afford, or do we want people to ride free on everyone else. And when that is recognized as the choice, most conservatives come my way.”
To Romney, the mandate that all individuals buy health insurance represented the conservative ideal of personal responsibility. Romney believed that whenever possible, individuals should take care of themselves, and not rely on the government for assistance. Too many people had been receiving “free” health care from the government even though many of those individuals could afford to pay for it themselves.
RomneyCare - The Truth about Massachusetts Health Care | Mitt Romney Central
Instructive as to the history, but in fact, the personal mandate has less to do with personal responsibility but is crucial to contain a notable market failures in healtchare:
-
The adverse selection problem. Without a personal mandate, healthy people will be less inclined to sign up, leading to a risk pool with higher risk ('adverse selection'
, which needs higher premiums to cover these, leading to even less healthy people to sign up, a possible death spiral - Simple insurance economics shows that a larger pool decreases premiums.