Mandating Insurance Coverage Is About Morality, not States' Rights, says Wharton Professor
The New York Times tells us that in more than a dozen statehouses across the country, lawmakers are pressing for state constitutional amendments to outlaw a key element of the health care plans under discussion in Washington — the requirement that nearly everyone buy health insurance or pay a penalty.
These lawmakers frame their argument as a battle over the rights of states vs. the reach of federal power. Opponents of the measures, including some constitutional scholars, tell The Times that the proposals are mostly symbolic, intended to send a message of political protest, and have little chance of succeeding in court over the long run. Still, those opponents acknowledge that the measures could create legal entanglements that would be expensive and could cause delays to health care changes. The measures could also be a rallying point for opponents in the increasingly tense debate.
Meanwhile, Wharton health care management professor Mark V. Pauly sees the debate in yet another context. Getting more Americans into the ranks of the insured “is a moral argument,” Pauly insists. “People should be insured so they do not under-consume effective health care, something we all care about because we care about our fellow human beings.”
About 25% to 50% of uninsured Americans could probably "afford" health insurance by shifting their personal spending priorities, Pauly and others have estimated. Of course, "afford," as Pauly notes, is not "an objective technical term." Many of those people would have to make difficult and painful choices in order to fit health insurance into their budgets.
So, how to motivate them? "I think an effective federal mandate is the best way," says Pauly. "The Baucus plan [now being considered by the Senate Finance Committee, chaired by Sen. Max Baucus of Montana] is very timid, however; the penalties are very low relative to the cost of coverage. You should charge a penalty for being uninsured that equals the cost of basic coverage — and offer the subsidies that allow you to make that cost affordable (in your judgment) for those who have lower incomes."
The dilemma, Pauly adds, "is that Congress is not willing to raise taxes enough to pay for subsidies to make coverage affordable, so it is getting cold feet about mandates. An alternative to a mandate, if you really do have philosophical scruples, is to require those who are not insured to have an earmarked account available to pay for medical care so that they cannot be a burden on others if they get sick. People need to save more anyway and take precautions to protect themselves. Who could object to this?"
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