The Market Update

Why Does Obama Fear Mandatory Health Care?

 

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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