Why Does Obama Fear Mandatory Health Care?

John Fout

Hillary Clinton and Barack Obama sparred over health care reform during their debate Thursday in Hollywood, Calif. A key issue separates their two plans: mandating health care coverage. Clinton supports a mandate; Obama does not.

According to a recent report by the Urban Institute, any health care plan (aside from a single-payer system) will not be able to provide universal coverage without a mandate for coverage. So why is Obama afraid of a mandate?

Clinton made a charge in the debate that Obama chose not to include a mandate because it was controversial:

Now, in Barack's plan, he very clearly says he will mandate that parents get health insurance for his children. So it's not that he is against mandatory provisions; it's that he doesn't think it would be politically acceptable to require that for everyone.

Obama did not answer the charge directly, choosing instead allude to his recent endorsement from Sen. Ted Kennedy (D., Mass), a long advocate for universal health coverage.

On his campaign Web site, Obama describes his health care plan as follows: "Quality, Affordable and Portable Coverage for All." He guarantees that every American who wants affordable health care will be able to get it, regardless of pre-existing conditions.

Obama said last night:

My belief is -- is that if we make it affordable, if we provide subsidies to those who can't afford it, they will buy it. Senator Clinton has a different approach. She believes that we have to force people who don't have health insurance to buy it; otherwise, there will be a lot of people who don't get it.

Obama's claims and reality don't match. Millions of children qualify for coverage through S-CHIP (State Children's Health Insurance Program), but parents don't always buy coverage for their children. Some can't afford it, while others have no idea it exists. Voluntary programs always leave people behind, even when they include subsidies like those in Obama's plan.

In fact, the Urban Institute notes that no study has ever shown better than a two-thirds rate of participation in a voluntary program. This means Obama's plan would leave about 15 million people without coverage, at least. This is an improvement over the 47 million without insurance now, but public health care costs could still stay high.

Those 15 million would still need health care in case of an emergency -- yes, that means visiting the local emergency room. Who pays for that? If they can't afford the visit, then the rest of us pay it in subsidies through higher taxes.

Worse, Obama has falsely attacked Clinton for the mandate in her plan. Politico.com has posted copies of a mailer from the Obama campaign assailing Clinton for forcing people to buy coverage they can't afford (see it here ). The ad blatantly misstates the facts.

First, Clinton's plan has significantly more subsidies than Obama's. It costs about $50 billion dollars more, but saves money in the long run because of ER costs. According to Peter Harbage, the author of John Edwards' universal plan, "mandates bring costs down." Second, Clinton's plan caps the premium payments based upon income levels. This ensures that nobody winds up paying for more than they can afford.

The Clinton campaign made additional charges about the ad. They say it is reminiscent of the ads that health insurance companies created in response to Hillary Clinton's 1993 health care plan. The ads, which featured the fictional couple Harry and Louise, helped create a groundswell of dissatisfaction over the proposed plan. Watch the ad below and note the similarities with the picture in Obama's ad.

Obama's campaign manager, David Axelrod, denied any allusion to the old campaign in a quote to politico.com.

Ironically, Obama's plan does exactly what he criticizes Clinton for: mandates. Parents are mandated to buy health insurance for children. Parents and others who game the system also wind up paying back money in his plan. Obama said in the debate:

If people are gaming the system, there are ways that we can address that, by, for example, making them pay some of the back premiums for not having gotten it in the first place.

Another word could be inserted for back premiums: penalties, which get prominent mention in Obama's attack mailer on Clinton.

Mandates have another important effect: a economic one. A serious concern for insurers is adverse selection, or the over representation of sick people vs. healthy ones. If healthy people opt out of the system, it drives up insurance premiums. Private insurers are in business to make a profit. Obama fails to recognize this critical economic point, which could hamper his plans future success.

Clinton has been widely criticized for failing to get universal health care approved in 1993, like Ted Kennedy and Harry Truman before her. But Clinton learned a lot from her failure. She was able to help pass S-CHIP for 6 million low-income children.

In the debate, she described how she would get health care passed as president:

[I]f you take business, which pays the costs and wants to get those costs down; take labor, that has to negotiate over health care instead of wages; take doctors, nurses, hospitals, who want to get back into the business of taking care of people instead of working for insurance companies; I think we will have a coalition that can withstand the health insurance and the drug companies, and that's what I intend to do.

Clearly, passing universal health care would require both a coalition of advocates and an incentive for health care companies to profit.

Democratic voters need to understand that Obama's plan is not only inconsistent, but it also lacks the key element of a mandate that holds the plan together. Clinton admitted she made a mistake in 1993. Democrats had better hope Obama can do the same now, before it's too late.

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