The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Moderate Senate Democrats Seek Alternatives to Individual Mandate

Posted by Alan on February 17, 2011

In a thread to an earlier post on this blog, reader Curt Cella wrote ” I think if I heard just one Democrat admit that there might – MIGHT! – be some issues worth fixing with PPACA I’d feel a burst of optimism.” And he’s not alone. The sausage-making process that led to the Patient Protection and Affordable Care Act was even messier than usual. The result: legislation that is in dire need of fixing and a lot of people pessimistic about the future of health insurance.

Any changes to the new health care reform law, however, will require bipartisan support. Otherwise what emerges from the House will be defeated in the Senate and vice versa.  Which makes Curt’s wish especially meaningful. Unless some Democrats start calling for substantial changes to the PPACA (and repealing the 1099 reporting requirements in the law doesn’t count as substantial — worthwhile, yes, but not substantial) nothing important is going to change.

Fortunately, those waiting for “just one Democrat” to admit that the PPACA needs fixing are in for some good news. There are at least four Democratic Senators and one liberal columnist seeking meaningful change in the PPACA. The fix they are focusing on is the laws requirement that all consumers obtain health care coverage by 2014 (the individual mandate).

ABC News recently reported that a group of Democratic Senators are looking for alternatives to the individual mandate. (This is a provision in the law that requires all Americans to obtain health care coverage by 2014 or pay a modest penalty). As one of those Democrats, newly elected Senator Joe Manchin puts it “I’ve always had a concern and a problem with the mandate, that we were forcing it, basically saying by the law of the land you have to buy the product. But on the other hand, I know that’s been the lynchpin. I’m looking for flexibility any way I can.” Other Senators mentioned as engaged in this search for an alternative to the individual mandate are Senators Ben Nelson, Claire McCaskill and Jon Tester. ABC News describes them as seeking to “improve” the PPACA, not repeal it.

Needless to say, liberals are a bit unhappy with these moderate-to-conservative lawmakers. The Senators are not backing down, however. For evidence, take a look at an exchange between MSNBC host Rachel Maddow and Senator McCaskell on the individual mandate (the meat of the interview begins at about the 1 minute, 40 second mark).

That there are at least four Democrats looking for an alternative to the PPACA’s approach to the individual mandate is important. Together with the 47 Republicans they represent a majority of the Senate. Yes, Republicans in the last Congress proved that in the wacky world of the Senate a working majority requires 60 votes, but having a simple majority is no small accomplishment. If nothing else it puts pressure on others in the Democratic Caucus, especially moderates like Senators Joe Lieberman and Kent Conrad, to join in the fun.

Not all liberals are criticizing the Senators searching for alternatives to the individual mandate. Washington Post columnist Ezra Klein notes that “[r]eplacing the individual mandate wouldn’t be particularly hard” and then offers four suggestions. (For the record, I’ve offered my own individual mandate alternatives in previous posts).

Mr. Klein fixing the individual mandate as good public policy and winning politics for Democrats. “The danger …  is not that the law does get changed, but that it doesn’t. That the GOP won’t let it thrive and the Democrats won’t let it die and so it just limps along.”  Improving the PPACA makes it more difficult to repeal the law and more likely the legislation will be implemented in a constructive manner.

Of course, the individual mandate is just one part of the law that needs fixing, justifying a mere “burst of optimism.” Moderate Democrats should also look at teaming with Republicans to refine the medical loss ratio provision, make premium subsidies and tax credits available outside the exchanges, and enact meaningful medical cost containment.  Changes like these would justify long-lasting optimism.


8 Responses to “Moderate Senate Democrats Seek Alternatives to Individual Mandate”

  1. Just a couple of points of clarification, although like usual you make a sound explanation.

    The rules of the Senate require 60 senators to break a filibuster but a bill can be passed with a simple majority of 51.

    In other words, unless a democratic senator wishes to make a public stink with a filibuster, all the senate needs is a simple majority of republicans and conservative democrats to agree on an option to the individual mandate. Finding something that 51 senators will agree to is the problem. The only one that the GOP can count on is Ben Nelson. He proved last year that he can be bought if the price is right.

    The U.S. Constitution grants authority to congress to levy taxes. Before the bill was passed Obama swore the penalty was not a new tax. Now that it has been challenged in court, he swears it is the right of congress to tax. Everything about the Individual Mandate is going to be decided by the Supreme Court on the basis of whether it is a tax or not. If they decide it is a tax, the law, while disagreeable, is consititutional. If they decide it is not a tax, the law is unconstitutional.

    Morality and practicality should have no bearing at all on their decision. The question of constitutionality rests entirely on how the Individual Mandate is defined.

    My prediction is that the U.S. Supreme Court will declare it unconstitutional followed by a cry for a Constitutional Amendment by Obamacare supporters. The problem is that an Amendment would require a referendum be held in each state and based on recent polls, it would have a hard time passing if the American population were asked. A simple majority would not be sufficient. Then 75% of the American population would have to be convinced.

  2. Curt Cella said

    Thank you Alan and since we are on the subject of Exchanges (See how I worked that into the conversation :-)?) Here’s a new article in the LA Times about just that and here’s why I am so depressed about our future:,0,3898880.story

    The thrust of this article lands squarely in my camp: That everything else is now just a sideshow to what is going on with the Exchanges. The building has begun: With those in place we are toast. The tragedy here is that while the media reports on these types of developments they don’t ask the requisite questions that should accompany this kind of article. That is: WHY DO WE EVEN NEED EXCHANGES?! Alan, call me on this if I’m wrong but the government is now spending vast sums of $$$ to RE-create something that ALREADY exists. Every agent website that features a Quotit or Norvax quote engine is basically already a functional Exchange. Here are its components: A list of health plans; a description of those plans; their premium(s). The consumer picks the plan they want and applies. If they have questions they can call a LICENSED health agent to assist them in the process. Contacting and using the LICENSED health agent costs the consumer nothing. ZERO. NADA. ZIP.
    IF no one can get turned away from health coverage in 2014 you already have a ready made infrastructure in place to service that marketplace – and frankly you have one that is far sturdier than one central website serving an entirety of that state’s residents. If this industry continues to be prohibited from offering plans across state lines….what are you actually gaining from a State Exchange? Nothing. Individuals and businesses can already buy ANY plan that is offered within their state. In 2014 same thing still holds and they can’t be turned away. Here again; why an Exchange? Which leads to this: The reason for an Exchange is simply this – in left leaning states like CA where you have Dems in control the belief is always the same: Government can do a better job than industry. Wherever you can inject a government run system you can and do. Which leads to this: IF our President says that it is the right of every American to have affordable access to health coverage and not be turned away why are the Exchanges being rigged up on a state by state basis? Shouldn’t the Exchange be national in scope? In each state the “exchange” can be anything the party in power wants it to be: Ranging from the most extreme agent job killing Exchange here in CA to a agent friendly information portal in Texas. How does THAT jibe with the intent of PPACA? It doesn’t. So we end up right back where we started – you get what you get by virtue of your zip code. That hardly makes PPACA the fix this COUNTRY needed when we started this process.

    You know folks: $241 million here….$241 million there…pretty soon that starts adding up to real money…

    • Curt Cella said

      Sorry Alan – I can’t help myself: The article includes this statement:

      Developing the technology to make such a virtual marketplace work is expected to be costly, however. Administration officials hope the grants awarded Wednesday will allow a few states to build systems that others will be able to adopt.

      Well no problem then for our friends in Sacramento who never met a deficit increasing project they didn’t want to embrace with open arms. Also good to see MA getting their hands on nearly $36 mil – I guess their already existing State Exchange (THE MODEL FOR NATIONAL PPACA PROGRAM!!!) can’t be rigged to accommodate the new model in 2014?!?

      Oh well it’s only $36 mil – a small price to pay as a thank you for Democratic votes in Congress for PPACA back in March, 2010. *cough*cough* PAYOFF! *cough*cough*

  3. Curt Cella said

    Quick side note – there is a comment right below the ABC link that caught my eye: A reader complaining that their co group insurance premium went up 60% due to the requirement that young adults up to age 26 be allowed to stay on their folks’ health plans. PERFECT example of just how truly screwed up this legislation is – the indiv market for young adults age 26 or younger features affordability affordability affordability! You can get a health plan for less than the cost of a cell phone calling plan. So – ignoring the obvious – the Admin and their cronies in Congress “fixed” something that wasn’t broken and in “fixing” that one thing broke a bunch of other stuff up the line.
    What all these self appointed experts in Congress don’t understand is that each marketplace is its own ecosystem – if you tamper with one element you tamper with the whole thing. Good grief: Isn’t it ironic that we spent all these years preaching the inherent value and worth of capitalism to the rest of the world only to turn around and destroy it on our own shores?

  4. Curt Cella said

    Okay color me officially confused now. I was under the impression that the problem with the individual mandate was that it was TOO WEAK. If you turn away from an indiv mandate don’t you have the same situation that was spoken of in an earlier post about the situation in NY?

    I think I have alluded to this a number of times: My observation is that the fines associated with the Individual mandate is that they are too small to have any impact on consumer behavior. Folks will simply pay the fine and continue to do whatever they are going to do (Not own a health plan.). This is especially so because we all know that health plan premiums will continue to rise as there is absolutely nothing in any legislation I can see that will cap or decrease the underlying costs of health insurance….wait for it… car services!!! Shouldn’t the play here be to put some real teeth in the Indiv Mandate?

    If you simply strike the individual mandate I….oh you know what…? I literally can’t follow this conversation anymore. 🙂 I feel like Charlton Heston at the end of Soylent Green: It’s the EXCHANGES people! It’s the EXCHANGES!!!

    • Alan said

      Curt: What’s confusing you is the nomenclature. In the PPACA an individual mandate is a penalty/tax. But just as poodles are all dogs, but not all dogs are poodles, an individual mandate does not need to be a fine. What I’ve suggested is a reward for maintaining continuous coverage — lower rates and no pre-existing condition exclusions. Ezra Klein offered other options. So what this discussion is about is not doing away with the individual mandate, but replacing the penalty/tax approach with something better (and more clearly consitutional).

      So, put simply, the message here is that lawmakers should change the nature of the individual mandate so it is more effective while focusing more on individual responsibility whether than government-imposed penalties. Hope that clarifies.

      And yes, the exchanges are a critical issue (especially here in California), but it’s not the only issue. You could do away with the exchanges tomorrow and you’d still be in a world of hurt. The challenge we all face is dealing with the truism that in life as in politics as in public policy: one never solves problems, one merely replaces them with new ones. Nothing wrong with you keeping the clarion call going concerning the exchanges so long as there are others equally focused on other equally important issues.

      • JimK said

        Under the current rules for Federal employees, if an employee is not enrolled in an insurance plan offered through the FEHBP for the five years preceding their retirement they are not eligible for retiree health benefits. Therefore an approach other than the Individual Mandate can work.

      • AndreaS said

        Or something similar on the Medicare side, those who delay signing up pay a larger premium based upon how long they waited (Part D penalty-like).

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