Sen. Ben Nelson Isn’t Abandoning Individual Mandate

Sen. Ben Nelson (D-NE) — who will likely face a tough re-election bid in 2012 — isn’t ready to endorse a specific alternative to the politically unpopular individual mandate, despite asking the Government Accountability Office (GAO) to study alternatives to the provision. In a press release commenting on the release of that analysis, Nelson said the report “identifies options to consider” but cautioned that the mandate is “necessary to maintain the ban on pre‑existing conditions” and keep costs down:

“The GAO report makes it clear that if the individual mandate is struck down by the Supreme Court, insured Americans will again have to pay both their costs and also pay the costs for the uninsured, which totaled $57 billion in 2008,” said Senator Nelson. “Nebraska families and businesses can’t afford to pay to insure their families and pay the costs of the uninsured, too.

“Without the individual mandate or a successful alternative, the number of uninsured is certain to grow and Nebraskans, as well as all Americans, will pay a hidden tax for their health care of $57 billion each year,” said Nelson. “Washington can consider the GAO’s findings to ensure that everyone pay their fair share, to ban pre-existing conditions and to increase coverage.

“Washington needs to explore the GAO report’s alternatives and others to see if there is a successful way to improve health reform.”

The report itself offers nine alternatives to the mandate without estimating how many people would likely be covered under each option:

– Modify open enrollment periods and impose late enrollment penalties.

– Expand employers’ roles in auto-enrolling and facilitating employees’ health insurance enrollment.

– Conduct a public education and outreach campaign.

– Provide broad access to personalized assistance for health coverage enrollment.

– Impose a tax to pay for uncompensated care.

– Allow greater variation in premium rates based on enrollee age.

– Condition the receipt of certain government services upon proof of health insurance coverage.

– Use health insurance agents and brokers differently.

– Require or encourage credit rating agencies to use health insurance status as a factor in determining credit ratings.

The mandate is designed to encourage individuals who wouldn’t normally purchase insurance coverage to enroll and expand the size of the health care risk pool, thus spreading the costs and risks of insurance across a larger population (and helping bringing down health care costs) This kind of policy has almost eliminated uninsurance in Massachusetts where, 98 percent of residents now have health insurance and is expected to insure 32 million Americans by 2019 as part of the Affordable Care Act.

But limited real-world experience with the alternatives offered above (some of which, like the public campaign, can work in conjunction with the mandate) has made it difficult to estimate how many people would be covered under a different proposal. Last month, MIT’s Jonathan Gruber — who was interviewed for the GAO report — published a paper modeling the auto enrollment and the late enrollment penalties and found that both would fall short of the ACA’s goals. He found that auto enrollment would reach 24 million uninsured — since “only about one-third of the uninsured are actually offered employer-sponsored insurance in which they can be auto-enrolled” — while the late enrollment penalty option would fare even worse, enrolling just 21 million Americans. The GAO details the complexities of each option.

Vulnerable Democrats are understandably interested in seeking viable alternatives, but in doing so they should be mindful of the fact that alternative solutions could reverse the progress made in current law. In talking about these policies they also risk buying into the GOP’s premise that there is something inherently wrong or terribly coercive about asking able individuals to take personal responsibility for their health care expenses. Instead of playing defense, they should be reminding the public of the long history of Republican support for the idea.