If anything can save Democrats now, it's populism — the notion that standing with 80% of Americans is real power. That's why the White House and progressives should be cheering the decision by a conservative Virginia judge to strike down the highly-unpopular federal mandate to purchase health insurance and preserve the rest of the federal health care reform law.
Conservatives have tried to repeal the mandate that everyone must buy health insurance as a way of taking out the full law in the court. Today's ruling makes clear that the popular and progressive parts of health care reform could go forward without the big sop to health insurance companies — mandatory purchases without regulated premiums.
Why would a progressive like me support repeal of mandatory health insurance purchases?
70% of Americans consistently oppose mandatory health insurance purchases.
If the last two elections have taught Washington a lesson, it's that we can do anything if 70% of Americans agree and do nothing if a majority cannot agree.
Most of the progressive parts of health care reform – subsidies to buy insurance for the poor and rules to make the marketplace fairer – enjoy 60% to 70% public support. Mandatory purchases, however, will consistently suffer the public's wrath because of popular distrust of the insurance industry and the high cost of health insurance premiums. Congressional refusal to limit how much health insurance companies can charge will ensure Americans' distaste only grows.
This issue is a ticking time bomb for Democrats and the courts may yet defuse it.
Beneath the polling, of course, is a strong social mores that the government should not be forcing Americans to buy health insurance that they cannot afford.
As a candidate, President Obama agreed with this popular sentiment. He argued, in stark contrast to Hillary Clinton, that, "The reason people don't have health insurance isn't because they don't want it, it's because they can't afford it." Once in office, Obama conceded to the Washington wisdom that government cannot force insurance companies to sell policies to all citizens without requiring that everyone have to buy it.
The notion that mandatory insurance is necessary for a "take-all-comers" law to succeed, like so many assumptions in the Beltway, needs to be reexamined. Fear of gaming by those who won't buy insurance until they are sick can be alleviated by creating greater carrots for buying coverage and less severe deterrents for failing to, such as a limited national open-enrollment period.
Current law now requires Americans to spend 8% of their income on health insurance by 2014 or face fines. Sliding scale subsidies would assist a family of four up to $88,000, but the $7,000 the family would have to pay could not even buy a policy likely to meet their needs, since the average policy for the family costs more than $12,000 today.
Mandatory health insurance has not produced lower premiums or health care budget savings in Massachusetts, the laboratory for the experiment. Massachusetts recently adopted strong premium regulation to give consumers relief from the highest health insurance rates in America.
New York, which has a take-all-comers law, is often cited as the disastrous consequence of the failure to enact mandatory purchases. But the empire state also is embarking on tough premium regulation to deal with its problems — which still rank it lower than Massachusetts in premium prices. Premium regulation is the key.
This principle set me on my journey as a consumer advocate more than twenty years ago. Californian endured double-digit premium hikes on their auto insurance under mandatory auto insurance laws imposed in 1986. This sparked a voter revolt in 1988 led by the founder of the consumer group I now head, Consumer Watchdog. Proposition 103, passed via ballot measure, created the nation's toughest premium regulation. A 2008 report by the Consumer Federation of America found California motorists have saved $62 billion on their auto insurance bills. Congress has no such appetite for tough regulation, however.
Driving is discretionary, so you can always take the bus rather than buy auto insurance. Breathing and not having to pay more than 8% of your income are the only requirements for the 2014 federal insurance mandate. When the public feels that blow, the backlash will make the midterm election look like a baby shower.
There's a lot worth saving in the health care reform overhaul, including provisions I fought for to limit out-of-pocket costs and force insurers to be fairer. Democrats should want to repeal the mandate because otherwise the most progressive parts of health reform could be lost. Laws tend to be repealed based on their most objectionable provisions.
Despite their moral objections to the mandate, Republicans may not want to diffuse the ticking time bomb of mandatory health insurance before it blows up on the Democrats. But they should be wary of standing too close when the bomb goes off. Narrowly repealing mandatory health insurance is something the public and many Democrats agree with, it's the common ground that Americans overwhelming stand on. The political establishment should join them.
