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Republicans Were For Obama’s Health Insurance Rule Before They Were Against It
RICARDO ALONSO-ZALDIVAR | 03/27/10 10:14 AM |
WASHINGTON — Republicans were for President Barack Obama’s requirement that Americans get health insurance before they were against it.
The obligation in the new health care law is a Republican idea that’s been around at least two decades. It was once trumpeted as an alternative to Bill and Hillary Clinton’s failed health care overhaul in the 1990s. These days, Republicans call it government overreach.
Mitt Romney, weighing another run for the GOP presidential nomination, signed such a requirement into law at the state level as Massachusetts governor in 2006. At the time, Romney defended it as "a personal responsibility principle" and Massachusetts’ newest GOP senator, Scott Brown, backed it. Romney now says Obama’s plan is a federal takeover that bears little resemblance to what he did as governor and should be repealed.
Republicans say Obama and the Democrats co-opted their original concept, minus a mechanism they proposed for controlling costs. More than a dozen GOP attorneys general are determined to challenge the requirement in federal court as unconstitutional.
Starting in 2014, the new law will require nearly all Americans to have health insurance through an employer, a government program or by buying it directly. That year, new insurance markets will open for business, health plans will be required to accept all applicants and tax credits will start flowing to millions of people, helping them pay the premiums.
Those who continue to go without coverage will have to pay a penalty to the IRS, except in cases of financial hardship. Fines vary by income and family size. For example, a single person making $45,000 would pay an extra $1,125 in taxes when the penalty is fully phased in, in 2016.
Conservatives today say that’s unacceptable. Not long ago, many of them saw a national mandate as a free-market route to guarantee coverage for all Americans – the answer to liberal ambitions for a government-run entitlement like Medicare. Most experts agree some kind of requirement is needed in a reformed system because health insurance doesn’t work if people can put off joining the risk pool until they get sick.
In the early 1970s, President Richard Nixon favored a mandate that employers provide insurance. In the 1990s, the Heritage Foundation, a conservative think tank, embraced an individual requirement. Not anymore.
"The idea of an individual mandate as an alternative to single-payer was a Republican idea," said health economist Mark Pauly of the University of Pennsylvania’s Wharton School. In 1991, he published a paper that explained how a mandate could be combined with tax credits – two ideas that are now part of Obama’s law. Pauly’s paper was well-received – by the George H.W. Bush administration.
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"It could have been the basis for a bipartisan compromise, but it wasn’t," said Pauly. "Because the Democrats were in favor, the Republicans more or less had to be against it."
Obama rejected a key part of Pauly’s proposal: doing away with the tax-free status of employer-sponsored health care and replacing it with a standard tax credit for all Americans. Labor strongly opposes that approach because union members usually have better-than-average coverage and suddenly would have to pay taxes on it. But many economists believe it’s a rational solution to America’s health care dilemma since it would raise enough money to cover the uninsured and nudge people with coverage into cost-conscious plans.
Romney’s success in Massachusetts with a bipartisan health plan that featured a mandate put the idea on the table for the 2008 presidential candidates.
Democrat Hillary Rodham Clinton, who failed in the 1990s to require employers to offer coverage, embraced the individual requirement, an idea advocated by her Republican opponents in the earlier health care debate.
"Hillary Clinton believed strongly in universal coverage," said Neera Tanden, her top health care adviser in the 2008 Democratic campaign. "I said to her, ‘You are not going to be able to say it’s universal coverage unless you have a mandate.’ She said, ‘I don’t want to run unless it’s universal coverage.’"
Obama was not prepared to go that far. His health care proposal in the campaign required coverage for children, not adults. Clinton hammered him because his plan didn’t guarantee coverage for all. He shot back that health insurance is too expensive to force people to buy it.
Obama remained cool to an individual requirement even once in office. But Tanden, who went on to serve in the Obama administration, said the first sign of a shift came in a letter to congressional leaders last summer in which Obama said he’d be open to the idea if it included a hardship waiver. Obama openly endorsed a mandate in his speech to a joint session of Congress in September.
It remains one of the most unpopular parts of his plan. Even the insurance industry is unhappy. Although the federal government will be requiring Americans to buy their products – and providing subsidies worth billions – insurers don’t think the penalties are high enough.
Tanden, now at the Center for American Progress, a liberal think tank, says she’s confident the mandate will work. In Massachusetts, coverage has gone up and only a tiny fraction of residents have been hit with fines.
Brown, whose election to replace the late Democratic Sen. Edward M. Kennedy almost led to the collapse of Obama’s plan, said his opposition to the new law is over tax increases, Medicare cuts and federal overreach on a matter that should be left up to states. Not so much the requirement, which he voted for as a state lawmaker.
"In Massachusetts, it helped us deal with the very real problem of uncompensated care," Brown said.
Republicans Were For Obama’s Health Insurance Rule Before They Were Against It