Sen. Baucus: The Last Guy I Expected to See with a Mandate
By Nick Sifuentes - Nov 13th, 2008 at 10:11 amThe progressive blogosphere is abuzz with the news that Sen. Max Baucus (D-MT), one of the most conservative Democrats in the Senate, has announced a preliminary plan detailing his vision for health care reform. What is noteworthy about his plan is that, as currently proposed, it is more progressive than even the plans President-elect Barack Obama put forth during the primary and general election.
While it incorporates the public-private marketplace system proposed by Obama, it goes one step further, requiring all Americans to purchase insurance after affordable options are available. The mandate was opposed by Obama during the primaries (Clinton and Edwards had plans which both included mandates), but Paul Krugman indicates that Obama’s opposition to mandates may prove more malleable than it appeared at first blush:
The word I hear, by the way, is that Obama’s opposition to mandates was tactical politics, not conviction — so he may well be prepared to do the right thing now that the election is won.
Also significant is that Baucus has decided to take the lead on the health care front, announcing a proposal even before such health care mavens as Senators Ted Kennedy and Hillary Clinton, or even Obama himself. Clearly, Baucus is signaling that even the more conservative members of the Senate may in fact be on board with plans for a significant overhaul of American health care; Baucus himself, as the chair of the Finance Committee, is in a very real position to turn an eventual proposal into actual legislation.
I’m glad that mandates have been written into Baucus’ plan; I preferred Clinton’s health care proposals over Obama’s in the primary season on the basis of the mandate, which makes universality economically feasible. Absent a mandate, there are inherent incentives for young, healthy people to opt out of spending on health insurance–why waste $150 a month on a plan they feel they won’t use, when they can instead use that money in other ways?
A mandate forces everyone to opt into either a public or a private plan, including the healthy, providing a base of support for people who will draw more out of insurance than they put in. This makes the plan more attractive than Medicare, the rumored insolvency of which is due to the fact that the majority of health care expenditures over a person’s lifetime occur in the last few years of life.
Mandates also make the plan more attractive to private insurers, as Matt Yglesias points out:
To the man on the street, things probably look better if your plan can be attacked as forcing people to do stuff. But of course to an insurance company executive or his lobbyists, things look better if your plan doesn’t allow the young and healthy (i.e., the actuarially desirable clients) to opt out of buying your product.
Certainly there are still any number of significant hurdles to overcome between now and 2009, when the new Congress may begin to look at health care proposals. Among them are insurance companies and their lobbyists–it goes without saying that they will not be huge fans of the proposal to end their ability to discriminate on the basis of pre-existing conditions, nor on limitations on their ability to charge higher premiums based on age or illness. Cost will be another limiting factor, but that is one that Baucus seeks to address in his draft, proposing limiting malpractice suits and eliminating fraud, redundancy and waste in the existing system as starting points. His proposal admits that any new health care plan will be expensive:
In the short term, health care reform would cost taxpayers more than the government can achieve in savings from all reforms and financing changes. Congressional leaders and the public must be realistic about the timeframe in which the fiscal success of reform is measured.
He also acknowledges the impending disaster if we fail to reform health care in America at all:
If we fail to act, however, we will double our current national expenditure on health care from $2 trillion to $4 trillion, continue to witness the plight of tens of millions of our citizens without health insurance cost shifting to those who do, continue to tolerate poor quality that leads to nearly 100,000 deaths a year, and watch our businesses become less competitive and our nation go further into debt. In short, we all must realize that the costs of inaction, both in human and financial terms, will eventually be far greater than any initial outlays. We must choose to invest now in a health care system that will richly repay the nation with greater health and economic stability in the long term.
Few people, and virtually none on the left, disagree with the contention that America’s health care system is broken. Baucus has just stepped up as one of the leading figures in fixing it. Despite the challenges inherent in crafting any such substantive legislation, I’m optimistic that we may see a program with something approaching universality roll out during Obama’s first term.
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