Hardship Waiver And Restrictions On Immigrants Buying Insurance Undercut Arguments For An Individual Mandate

I have long maintained that progressives should accept an individual mandate only as part of a broad social contract with the government. The government must promise to ensure that every American has access to at least one quality, affordable, cost-effective health insurance plan, and only then can it demand Americans buy health insurance. The Senate bill completely fails to hold up its end of this social contract, and that is made clear by its i inclusion of “hardship” waivers.

Any person can get an exemption from the individual mandate if the cost of premiums exceeds 8% of his or her income. A properly working universal health care system does not have a “hardship” exemption. Instead of the government saying, “we will not force you to buy health insurance anymore because we let the insurance companies make it too expensive for you,” the proper response is for the government to say, “If your insurance ever starts to get too expensive, we will make sure you can afford it.”

It is the height of irony that the hardship waiver is for people whose premiums exceed 8% of their income, but for people making between 300-400% of FPL, the tax credits they get will only be sufficient to make the silver plan cost 9.8% of their income. One part of the bill is saying that spending 8% of your income on insurance is a hardship, and another part of the bill is only giving people enough affordability tax credits to make insurance cost 9.8% of their income. The "silver level" plans have a very low actuarial value 70%, and people would have the option of choosing the super-junk 60% actuarial value "bronze level" plans. So, the people between 300% and 400% FPL might technically have an option that will just barely cost just under 8% of their income, but it will be for nearly worthless junk insurance.

Restrictions on undocumented immigrants

The other item in the Senate bill that makes a mockery of the intellectual foundation behind the individual mandate is the draconian restrictions on undocumented immigrants. The bill would make it illegal for undocumented immigrants to buy insurance on the new exchange--even if they were willing to pay full price with no tax credits.

One of the points of an individual mandate was to get everyone into the system, so there is not more uncompensated care. Yet while this bill forces Americans to buy health insurance, it creates huge barriers to stop roughly 15 million people in the country from buying insurance even if they wanted to. And without a real employer mandate, the Senate bill makes it less--not more--likely undocumented immigrants will be uninsured. The bill puts in place an individual mandate to increase the number of people with coverage, but takes other important actions at the same time to reduce the number of people with coverage.

Why is it that people defending the individual mandate are not equally using the same arguments to forcibly push for less restrictions on buying insurance, and a real employer mandate? These two changes would probably do as much, if not more, to bring people “into the system” than an individual mandate.