Why stripped-down "consensus" health reform probably won't happen.

How to fix health policy.
Jan. 21 2010 6:12 PM

There's No Such Thing as "Health Care Lite"

Why a stripped-down "consensus" bill probably won't happen.

Click here for a guide to following the health care reform story online.

(Continued from Page 1)

That's an understatement. Sen. Chuck Grassley, R-Iowa, was perhaps the most extreme example. As the bill progressed through the Senate, Grassley went from praising the individual mandate (the bill's requirement that all Americans purchase health insurance) as a matter of "individual responsibility" (Aug. 4) to denouncing it as an "intrusion into private lives" (Sept. 22) to speculating that it violated the Constitution (Dec. 23). The bill cleared the Senate the following day.

In the Stephanopoulos interview, Obama unbandaged the mummy of health reform lite a bit further as he delved into policy:

If you ask the American people about health care, one of the things that drives them crazy is insurance companies denying people coverage because of preexisting conditions. Well, it turns out that if you don't—if you don't make sure that everybody has health insurance, then you can't eliminate insurance companies—you can't stop insurance companies from discriminating against people because of preexisting conditions. Well, if you're going to give everybody health insurance, you've got to make sure it's affordable. So it turns out that a lot of these things are interconnected.

This is the "free rider" problem: Insurance companies, the reasoning goes, will go broke if they're no longer permitted to turn away customers who avoid purchasing health insurance until they get sick. Hence the individual mandate. But people who lack health insurance often lack the money to purchase it; if you require them to do so, many of them will go broke without some sort of subsidy. Princeton economist Uwe Reinhardt has written that this makes health reform a "three legged stool that is useless without all three legs." Include all three legs, however, and health reform isn't so lite anymore.

A minority view holds that the free rider problem isn't as urgent as it's cracked up to be. Obama himself took this position during his primary campaign. (Grassley changed his spots on the individual mandate to oppose health reform; Obama changed them to support it.) Darshak Sanghavi offered a version of this argument yesterday in Slate. Yale political scientist Jacob Hacker made a somewhat different version of the argument in 2008 while Obama and Hillary Clinton were quarrelling over the individual mandate. But both of these arguments rely on the assumption that health reform would entail a very large role for government—either by establishing a public option (Hacker) or by extending government subsidies to lower-income people to a far greater extent than a stripped-down health reform bill ever would (Sanghavi).


Finally, Obama told Stephanopoulos:

Now, I could have said, well, we'll just do what's safe. We'll just take on those things that are completely noncontroversial. The problem is the things that are noncontroversial end up being the things that don't solve the problem.

This is why, one day later, the White House announced it was going to let "the dust settle" before settling on a plan. I can't improve on the conclusion to what I wrote in August on this topic: You want simple? Enact single-payer.

E-mail Timothy Noah at chatterbox@slate.com.

Timothy Noah is a former Slate staffer. His  book about income inequality is The Great Divergence.


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