In the wake of the failure of the California health care reforms and the continuing focus on Massachusetts’ reforms, everyone in the American health care policy community seemed to be focused on mandates. They have also been the subject of reporting and opinion pieces for the last two days in the New York Times as the key difference in proposals put forward by Senator Clinton and Senator Obama in getting to universal coverage.
Mandates are not a new idea. We have mandates for all sorts of insurance-related products. Drivers in the U.S. are mandated to have automobile insurance, but the effectiveness of this mandate varies greatly from state to state. Sherry Glied reminds us that passing a mandate by itself does not guarantee universal participation in a program.
Glied’s cautionary findings were meant to introduce some history into the debate on personal mandates obliging individuals to purchase health insurance. The personal mandate is a key feature of the Massachusetts reforms and proved to be a major stumbling block for passage of universal access in California.
Mandates were also a key topic at the National Academy of Social Insurance annual conference last week. Is it necessary for states and/or the federal government to institute a personal mandate requirement (there was little discussion of employer mandates) to get to universal coverage?
Personal mandates to acquire health insurance occupy an interesting space in health care debates. For many economists, mandates and subsidies travel together. Mandates are the obverse side of the coin of subsidy. If you can get the numbers right, and figure out how many people at what price would need a subsidy to afford insurance, you can mandate it. Economists and bureaucrats can solve the technical problem of numbers and price. The political scientists come along to remind the audience that mandates seem to be the opposite of concepts of social solidarity and that both are uniquely and intrinsically tied up with the culture of the place, be it a state like Massachusetts, a city like San Francisco, a country like the Netherlands, or, as Uwe Reinhardt noted in his opening remarks, the U.S. Marine Corps.
At times the political scientists and economists switch sides, but what the focus on mandates does tell us is that mandates live in that messy territory known as policy, nestled uncomfortably between economics and politics.
As we enter into 2008 and the Massachusetts reforms have been up and running for a year, there has already been much discussion of whether the Massachusetts experience is generalizable to other states and the federal government. Could other states craft universal coverage using mandates, subsidies, and “Connectors”? Is this system in some way applicable to the federal government?
To date, 39 states have enacted health coverage reforms in the past two years. The Massachusetts reforms enacted in 2006 have served as a beacon to other states, but they take on added urgency with the failure of the California reforms and the coming presidential election.
There was much enthusiasm at NASI for mandates by economists as diverse as Jonathan Gruber, Eugene Steuerle, and Mark Pauly. If you can create the right conditions, craft the right numbers, and have adequate financing and enforcement, mandates can work.
A note of caution was raised when the discussion moved on to California. It seems that defining the right conditions is harder in practice. Can mandates work in a place with a very different political culture and where additional financing would have to be found to make them viable? Massachusetts had an available pool of federal money and many fewer uninsured residents than California. It also struck at the right moment. The final vote on the California reforms came to pass right after the state realized that it faced more than a $14 billion shortfall due to the subprime mortgage mess and the slowing economy. The conditions of the 2008 economy are very different from 2006 and could well slow down the engine of state reforms as states scramble to balance their budgets in a recessionary economy. However, as Larry Brown pointed out, the political culture of Massachusetts is unique and not directly related to its economy; he suggested that it was blessed by a spirit of comity and civility not replicated in many places. He thought only a handful of states had the political and cultural capital to follow Massachusetts.
The politics of mandates for health insurance are even complicated in international models that were already based on social insurance and adequately funded. Kieke Okma reminded listeners at NASI about the Netherlands’ experience as it transitioned off a system of sickness funds and a concept of social solidarity to a system of managed competition and personal mandates. The Netherlands had higher compliance of about 99% under the old system without mandates. Under the new reforms, compliance has gone down and has become something of a problem for the government.While the numbers are still impressive by a U.S. standard, the Dutch experience raises an interesting question. Do you need mandates to get to universal coverage, or do you need a political culture that supports universal coverage? Can mandates supplant or substitute for a culture of social solidarity? Did Massachusetts achieve its reforms not only because it had the financial wherewithal, but also because it possesses a unique historical and political culture that embraces both concepts of social solidarity and personal individual responsibility? Do other states posses the same or other unique cultural features that would allow them, if they have financing, to move towards universal coverage?
The politics of universal coverage and health care reform in the U.S. and the Netherlands will be featured later this spring in the May/June issue of Health Affairs.