Personally, I favor a mandate for the same reason Paul Krugman does: unless everyone (or nearly everyone) buys in, you get adverse selection and the risk pool is worse, causing premiums for everybody else to go up.
BUT, I understand that a mandate can be a real burden for some people. And I understand that ideologically, many, many people - left, right, center - are opposed to the idea of forcing people to purchase private health insurance.
Paul Starr has a proposal - there would still be a mandate, but there would be a potential opt-out. People could opt out - the only problem is they couldn't opt back into the system without any consequence:
http://www.prospect.org/cs/articles?article=averting_a_health_care_backlashThe bills in Congress would impose a fine on people who decline to buy coverage after the system is reformed, unless they have a religious objection to medical care or demonstrate that paying for insurance would be a financial hardship even with the new subsidies being provided. Under the Senate bill, the fines per person would begin at $95 in 2014, rising to $750 two years later. The House bill sets the penalty at 2.5 percent of adjusted income above the threshold for filing income taxes, up to the cost of the average national premium.
The trouble with the fines is that they communicate the wrong message about a program that is supposed to help people without insurance, not penalize them. Many people simply do not understand why the government should fine them for failing to purchase health coverage when it doesn't require people to buy other products.
The rationale for the mandate is that it is necessary to carry out the other reforms of insurance that the public overwhelmingly approves -- in particular, ending pre-existing-condition exclusions by insurance companies. If legislation banned those exclusions without a mandate, healthy people would rationally refuse to buy coverage until they got sick, and the entire insurance system would break down. The mandate is designed to deter people from opportunistically dipping into the insurance funds when they are sick and refusing to contribute when they are healthy.
But Congress could address this problem more directly. The law could give people a right to opt out of the mandate if they signed a form agreeing that they could not opt in for the following five years. In other words, instead of paying a fine, they would forgo a potential benefit. For five years they would become ineligible for federal subsidies for health insurance and, if they did buy coverage, no insurer would have to cover a pre-existing condition of theirs.
The idea for this opt-out comes from an analogous provision in Germany, which has a small sector of private insurance in addition to a much larger state insurance system. Only some Germans are eligible to opt for private insurance, but if they make that choice, the law prevents them from getting back at will into the public system. That deters opportunistic switches in and out of the public funds, and it helps to prevent the private insurers from cherry-picking healthy people and driving up insurance costs in the public sector.
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The law ought to treat children, however, differently from adults. Just as there is a public interest in assuring that children receive an education, so there is a public interest in seeing that children receive health care. Instead of providing a five-year opt-out for children or imposing a fine on their parents for failing to cover them, a default program should cover any child who isn't otherwise registered for private or public insurance. That default program could be the State Children's Health Insurance Program or Medicaid; whether the parents owe any money for that coverage should be dealt with as part of the income tax.
Personally, I think this could work. I would tweak it slightly.
First, I would say that bans on pre-existing conditions, rescission etc., would still apply. The only thing you wouldn't be eligible for would be subsidies.
Second, I'd say increase the subsidies, to cover a larger swathe of the population.
What do people think of this?
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