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What The Individual Mandate Vote Means

On Tuesday, Missouri held a referendum on the individual mandate, and it went down with a resounding 70% of the vote. Conservatives have responded with a bout of crowing (see, for instance, here, here, here, here, here, here, here, and here, among many others.) Now, it's certainly true, and has always been true, that the individual mandate, once a bipartisan notion and still defended by poor Mitt Romney, is the least popular aspect of the Affordable Care Act and provokes bipartisan opposition. (Many other aspects are quite popular.)

But let me raise a few points that have not come up in the outpouring of conservative gloating. First of all, Missouri is not a "bellwether" state right now. It (narrowly) supported John McCain in 2008 when the country as a whole backed Barack Obama by 7 percentage points. Second, Tuesday's election was a low-turnout primary with a massively disproportionate Republican electorate, accounting for two-thirds of all voters.

Now, as I said, it remains true that the individual mandate is the least popular element of the Affordable Care Act. Part of the conservative fantasy is that Republicans can tug on this one thread and thereby unravel the whole structure of health care reform. The mandate does play an important role in the program. If you require insurers to cover everybody regardless of health conditions, then you have to prevent people from going without insurance and then just signing up when they get sick. If you let people do that, then healthy people will stay out of the pool until they get sick, rates will go up, driving out others, until there's nobody left but those with serious medical conditions. Eliminating the mandate is therefore the Leninist plan to collapse the system.

But, first, this kind of collapse is something insurers will fight desperately to stop (and insurers still have a lot of clout with Republicans.) Worse, it's not the kind of result conservatives would desire either. You'd still have a system of private insurance subsidies and increased Medicaid coverage for the indigent along with regulated private insurance. Collapsing the private insurance market might well just push everybody into Medicare or Medicaid. It's the single-payer health fantasy come to life! (That, of course, is one reason why I think it won't happen.)

Second, liberals should keep in mind that while you need some mechanism to prevent free-riding, an individual mandate isn't necessary. Paul Starr has proposed a clever alternative that responds to objections about coercion while still fulfilling the core function of preventing free riders:

[L]et individuals opt out of the new insurance system, without a penalty, by signing a form on their tax return acknowledging that they would then be ineligible for federal health insurance subsidies for a fixed period — say, five years.
During that time, if they had second thoughts and decided to buy health insurance, they would have no guarantee that they could find a policy or that it would cover pre-existing conditions. In other words, they would face a market much like the one that exists now. And while that’s hardly a desirable position to be in, they would have made the decision themselves, and the option to step outside the system would relieve Republican concerns about government mandates.

Democrats should work on implementing Starr's idea. It's better than having endless political fights over the single least popular aspect of the Affordable Care Act.