For the past three days, the political world has been largely focused on the Supreme Court, and the arguments over whether President Obama’s signature legislative achievement is constitutional or not. At the heart of the argument is the “individual mandate,” a section of the law which would require Americans to pay more money on their income taxes if they could afford health insurance but chose not to purchase it from a private company.
In the 2008 presidential election campaign, Barack Obama disagreed with Hillary Clinton on this issue. Clinton was for the individual mandate, Obama was not. Once he got elected and started wheeling and dealing with the insurance industry, however, Obama agreed to include the individual mandate in the law now universally known as “Obamacare.”
While we’re all waiting for the verdict from the Supreme Court, I thought it would be worthwhile to dig into the actual origins of the concept of the individual mandate. Now, the idea itself may have been around for much longer than the documentation I could find online, but the real political push behind the idea seems to have started in 1989, from the ultra-conservative Heritage Foundation.
Stuart M. Butler, who at the time was Heritage’s Director of Domestic Policy Strategies, wrote the second chapter of a position paper with the title A National Health System for America. [Heritage has a PDF version of this document you can download from their website.] The document was over 100 pages long, and envisioned a “consumer-oriented, market-based, comprehensive American health system” that would become “the model for the entire industrialized world.” It was a strictly conservative plan, as evidenced by the inclusion of the idea of replacing Medicare with a voucher system (the same thing Paul Ryan is now championing, in other words).
In his chapter “A Framework for Reform,” Butler lists three elements which would be required to remold the American health care system into his conservative vision for the future. The very first of these, in full (chapters referenced are from the same document):
Element #1: Every resident of the U.S. must, by law, be enrolled in an adequate health care plan to cover major health care costs.
This requirement would imply a compact between the U.S. government and its citizens: in return for the government’s accepting an obligation to devise a market-based system guaranteeing access to care and protecting all families from financial distress due to the cost of an illness, each individual must agree to obtain a minimum level of protection. This means that, while government would take on the obligation to find ways of guaranteeing care for those Americans unable to obtain protection in the market, perhaps because of chronic health problems or lack of income, Americans with sufficient means would no longer be able to be “free riders” on society by avoiding sensible health insurance expenditures and relying on others to pay for care in an emergency or in retirement.
Under this arrangement, all households would be required to protect themselves from major medical costs by purchasing health insurance or enrolling in a prepaid health plan. The degree of financial protection can be debated, but the principle of mandatory family protection is central to a universal health care system in America.
Help would be provided in two ways. First, the tax code would be amended, as Chapter 3 describes, to give tax relief to individual purchasers of health insurance or prepaid plans and to provide tax credits for out-of-pocket expenses. Second, government would aid those who, because of income or medical condition, find the cost of protection to be an unreasonable burden. Such aid could take the form of vouchers for purchasing insurance or state-managed systems as described in Chapter 5.
The requirement to obtain basic insurance would have to be enforced. The easiest way to monitor compliance might be for households to furnish proof of insurance when they file their tax returns. If a family were to cancel its insurance, the insurer would be required to notify the government. If the family did not enroll in another plan before the first insurance coverage lapsed and did not provide evidence of financial problems, a fine might be imposed.
In the mid-1990s, of course, the Democrats attempted health care reform. The most famous of these attempts was Hillary Clinton’s, but many other Democrats also proposed plans of their own in Congress. By 1994, Butler (now listed as “Vice President and Director of Domestic Policy Studies” at Heritage) wrote a critique of the individual mandate included in one of these Democratic bills, although it’s interesting to note that he doesn’t seem to be against the concept itself, rather choosing to complain about the projected costs to families of the plan. Constitutional questions aren’t even raised.
By 2003, congressional Democrats had failed in their health reform efforts (and Obama’s election was still five years in the future), so it was safe once again for conservatives to back the individual mandate. At this point in time, Butler’s title at Heritage was “Vice President of Domestic and Economic Policy Studies,” and he was testifying before the Senate Special Committee on ageing. Here, however, he specifically points out at the beginning of his testimony that the views he is expressing are his own and not the official position of the Heritage Foundation. During his testimony, Butler gives even more detail on how he sees the individual mandate working:
The current social contract should be replaced with a more rational one. In a civilized and rich country like the United States, it is reasonable for society to accept an obligation to ensure that all residents have affordable access to at least basic health care — much as we accept the same obligation to assure a reasonable level of housing, education and nutrition.
But as part of that contract, it is also reasonable to expect residents of the society who can do so to contribute an appropriate amount to their own health care. This translates into a requirement on individuals to enroll themselves and their dependents in at least a basic health plan — one that at the minimum should protect the rest of society from large and unexpected medical costs incurred by the family. And as any social contract, there would also be an obligation on society. To the extent that the family cannot reasonably afford reasonable basic coverage, the rest of society, via government, should take responsibility for financing that minimum coverage.
The obligations on individuals does not have to be a “hard” mandate, in the sense that failure to obtain coverage would be illegal. It could be a “soft” mandate, meaning that failure to obtain coverage could result in the loss of tax benefits and other government entitlements. In addition, if federal tax benefits or other assistance accompanied the requirement, states and localities could receive the value of the assistance forgone by the person failing to obtain coverage, in order to compensate providers who deliver services to the uninsured family.
The individual mandate which was included in Obamacare is so close to what Stuart Butler of the Heritage Foundation initially suggested that we can honestly say there is no appreciable difference between the two. The only real difference is whether Republicans supported the idea or not. When it was branded as a conservative idea from a conservative think tank, then Republicans embraced the idea as requiring “personal responsibility” from all those deadbeats out there who were getting a free ride on the taxpayer’s dime. These were the days when “reforming welfare” was a big deal, and Republicans tended to lump a lot of things under the dreaded “welfare” label, to give some rhetorical context.
But when Democrats agreed to the idea — in the 1990s, and then later when Obamacare was being debated — Republicans decried the idea and refused to support it (to put all their histrionics and hyperventilating over Obamacare’s mandate in the mildest terms I can manage). That, it seems, is really the only thing which has changed over time. The idea itself hasn’t changed in any appreciable way from what was proposed in 1989. Republicans’ support of the idea, however, waxes and wanes depending on who proposes it.
Well, to be fair, I should say “those Republicans who are not named Mitt Romney,” as Mitt is truly in a class by himself when it comes to supporting… and then not supporting… the idea of the individual mandate. But that’s a subject for an entirely different column.
Chris Weigant blogs at:
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