Goodbye, Harry and Louise
DURING THE democratic presidential primaries, the key domestic policy disagreement was over the candidates' health reform plans. Should the government require every individual not covered by employers or a public plan to buy health insurance? Hillary Clinton and John Edwards said yes; Barack Obama said no. Now the insurance industry has announced its support for an individual mandate, a move that could bring the country closer to universal healthcare.
Favoring a mandate that everyone must have insurance would seem like a no-brainer for insurers - it guarantees them more customers who can spread the costs around. But the trade group America's Health Insurance Plans and the Blue Cross and Blue Shield Association have added a major concession from their side: In exchange for the mandate they would agree to provide coverage to all comers, whatever their age or preexisting conditions. This could lead to a debate in which insurers are not working to sabotage agreement, as they did with the Harry and Louise ads in the 1990s.
The insurance industry's unwillingness to cover everyone has always been a great hurdle to reform. The industry has resisted any requirement from government that it cover everyone for fear that only the sick would enroll in the new plans, driving up the cost of premiums for all. With an individual mandate, the companies are assured they will also have healthy customers buying policies - because they have to.
The individual mandate is one of the pillars of the Massachusetts health reform law. That law has worked because its designers wisely allowed narrow exemptions for those too rich to qualify for a state-subsidized plan and too poor to buy a commercial one. The designers also came up with a simple enforcement device: Those who fail to buy coverage would be penalized on their tax return. To keep employers from dropping coverage, the Massachusetts law exacts a modest fee from those with more than 10 workers who fail to provide a minimum level of insurance.
The combination of an individual mandate and guaranteed access is also part of the reform plan that the chairman of the Senate Finance Committee, Max Baucus, unveiled last month.
During the primaries, Obama said that his own reform plan, which would mandate insurance for children and lower the cost of it for everyone else, could come close to universal coverage. But Obama should be open to the Massachusetts argument: that an individual mandate with guaranteed access and a mandate on employers would get the country even closer.
There are many hurdles, including rising healthcare costs, ahead. But the Obama administration should seize the opportunity the insurance indusry is presenting, and finally get the nation to yes on universal coverage. 