Buy or Tax

The reason why an individual mandate—to buy insurance unless you have it from your employer or from the government already (Medicare, Medicaid)—is part of the health care act is because the Obama administration blinked. The government has full powers to levy taxes. Indeed the federal government has been collecting money for Medicare and Medicaid since 1966. In effect we’ve had a single-payer and centrally controlled health care system since then (thus for 46 years), but only for selected groups. This is a conceptually straight-forward approach. To get a workable national health care system, all we’d have had to do was to extend Medicare to anyone who is not already covered. In this country, however, there is a deep-seated traditional resistance to centrally-managed anything. Therefore, feeling that resistance, the Obama administration caved—and still failed to get bipartisan support. In my simple black-and-white world, if you can’t pass a proper national health care act—why then you walk. You say, like Mrs. Clinton might have said a while back, “Well, I tried.” You can’t make the horse drink.

The compromise then produces the controversy now. The compromise was to “let the private sector do it”—but with a half-hearted attempt to make everybody use the private offering. The battle now is couched in the totally irrelevant context of interstate commerce—and whether or not the government can compel anyone to buy—anything. This the government may not be able to do. But it certainly can tax. But the votes simply aren’t there to solve the problem in a straight-forward manner—by taxation.

Now conceptually I see no real difference between forcing me to pay a tax on the one hand and forcing me to purchase health insurance on the other. In either case I have to cough up the dollars. But if this is seen as opening the door to government-mandated purchases in general, I’m not surprised that the Supreme Court seems skittish; reader russell provides some of the Court’s misgivings in a comment to the earlier post on this subject (link).

More realistically, an insurance-based approach is inferior to a central-single-payer system. It costs a whole lot more. A national system does not, per se, prohibit an insurance-based system to coexist with it. A national system will always involve some rationing—and an overlay of insurance-paid extra benefits will satisfy the rich.

It is for these reasons, needless to say, that you won’t find much praise for the current act anywhere on LaMarotte. It is flawed in conception—and now it might fail in detail. At best it will be upheld by a 5:4 vote. If it goes down, Medicare and Medicaid may follow. After all a designated tax—designated for health care—may in some future lawsuit be judged to be a mandate to buy something—which it actually is.