South Bend mayor Pete Buttigieg during the Democratic primary debate at Loyola Marymount University in Los Angeles, Calif., December 19, 2019. (Mike Blake/Reuters)
The grievously misnamed Affordable Care Act was in part an effort to replicate the widely admired Swiss health-care system in the American context. The basic problem with that always has been that Switzerland is full of Swiss people, while the United States is full of maniacs.
The preexisting-conditions mandate, which is popular, creates a free-rider problem (i.e. nobody has any incentive to sign up for health insurance until they are actually sick, and so insurance cannot actually function as insurance), hence the hated individual mandate, the rule that people buy insurance. The Swiss enforce their individual mandate ruthlessly—if you fail to sign up for a plan, then the government signs you up for one, and you owe your new insurer back premiums and interest to cover any lapse in coverage. The Swiss achieve practically universal compliance; we repealed our mandate, because we like the benefits but don’t want them to have any strings attached.
Pete Buttigieg is attempting to resurrect the ACA mandate in part with his new health-insurance proposal, which would create a public option: basically Medicare for all who want it . . . and a few who don’t. Under Buttigieg’s proposal, those who fail to sign up for a qualifying health-insurance plan would automatically be enrolled in the government plan, and they would owe premiums — including retroactive premiums for lapses in coverage.
The Washington Post quotes left-wing critic Matt Bruenig characterizing the proposal as a “supercharged” version of the ACA mandate and accusing Buttigieg of deploying “misleading rhetoric” about his plan. Matt Bruenig is the dishonest fellow who fabricated quotations from me defending the racist antics of Donald Sterling, so I suppose he is something of an authority on misleading.
It is very difficult to disentangle the individual mandate from the preexisting-conditions rule and other benefits in the form of coverage and pricing controls. You can have insurance that functions as insurance (i.e. a financial instrument that hedges against the risk of future events that may or may not come to pass) but if you want insurance that functions as a welfare program (performing the logically incoherent task of “insuring against” preexisting conditions, i.e., things that already have happened) then you need the individual mandate and other unpopular measures in order for the market to function.
Buttigieg implicitly concedes as much. He is right to do so, and Republicans were wrong to repeal the mandate while leaving much of the rest of the ACA regime in place. An ACA-style program with a robustly enforced individual mandate may be a bad policy, but it is a coherent policy, and a better policy than an ACA-style program without an individual mandate.
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