The Paul Ryan Solution to the Individual Mandate Dilemma


With the moral and legal legitimacy of an “individual mandate” to purchase health insurance continuing to be the subject of controversy, it’s worth observing that conservative hero Paul Ryan lights the path to reformulating the exact same policy in a manner that seems to pass the right’s ideological litmus test. After all, once Ryan abolishes Medicare what does he want to replace it with? Well, with vouchers to buy private health insurance. And what’s the structure of the Affordable Care Act? Well, it’s vouchers to buy private health insurance. So why did Barack Obama’s proposals include an individual mandate and Ryan’s don’t? Simple. Ryan has solved the adverse selection problem without a mandate by simply saying that everyone gets a voucher, but the voucher can only be used to buy health insurance. In principle you “could” opt out from this system but nobody would.

The way it would work is that instead of imposing a mandate, and then offering subsidies to low and middle income people in order to help them comply with the mandate, you’d impose a progressive income tax (whose constitutionality I take it is not in doubt) and then hand everyone a flat voucher that could be used only to buy health insurance.

My proposed revision to the plan would make the underlying nature of the proposal more transparent, and in that sense would be a marginal improvement over the way the ACA actually works. But the point is that in practice they’d be exactly the same. And the latter policy—taxes to fund vouchers—is so uncontroversial, that even Paul Ryan thinks it should be allowed. So anyone who thinks about the issue for a bit will swiftly recognize that there’s no real principled objection here coming from the right. The real difference between Affordable Care Act coverage and RyanCare is that the idea of the ACA is to ensure that everyone—even poor people—get adequate health care. Under RyanCare, by contrast, over time only rich people will be able to afford health care. But with the money Ryan saves by not ensuring adequacy of care, he’s able to ensure that rich people will pay much lower taxes. This, unlike mandate nonsense, is a real point of divergence between the right and left in America.