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Achieving Near Universal Coverage: Evaluating Single Payer, Employer Mandate, and Individual Responsibility Models

Looking around the world, there seems to be three main ways to get near universal coverage. There is the single payer model, the employer mandate model, and the individual responsibility model. Countries can use only one of the models, or a strange combination of all three. A direct individual mandate to buy insurance from private companies is not needed to achieve universal or near universal coverage.

Single Payer

The single payer model is the simplest and most effective way to get true universal coverage (instead of near universal coverage). Under this model, the government collects money through taxation and uses it to provide everyone with basic health insurance (Canada, Taiwan, Australia, Medicare in the United States), or even to directly provide everyone with basic health care (UK, Norway, VA system in the United States). The single payer model is the most progressive health care system. It treats everyone equally, and does not place a wasteful private insurance entity between the patient and their doctor.

Employer Mandate With Social Safety Net

Another way to achieve near universal coverage is with a strong employer mandate and some form of a social safety net for the unemployed. This is how Germany, and to a lesser extent, Hawaii provide for near-universal coverage. All employers must provide employees with health insurance in Germany, and people who lose their job stay on something like super COBRA until they find new employment. Hawaii has a strong employer mandate, with many of the unemployed or underemployed covered by Medicaid. Because of the structure of Hawaii’s ERISA waiver from Congress, it has been unable to modify its employer mandate law to plug many of the system’s loopholes. Even with these loopholes, Hawaii’s employer mandate has allowed the state to achieve 92.1% coverage. Nearly identical to the 93% coverage the CMS predicts the Senate bill will achieve by 2019. Simply providing Hawaii with the House bill’s expansion of Medicaid to everyone below 150% of FPL would eliminate a large percent of the state’s uninsured.

Individual Responsibility

Some countries work on an individual responsibility system to provide health insurance. Every individual is responsible for the purchase of a private, almost exclusively non-profit, health insurance plan. In exchange for requiring everyone to buy health insurance, the government highly regulates the insurance entities, mandates the sale of only a few, precisely defined, high-quality insurance packages, and, through subsidies, makes sure everyone can afford the insurance they are required to buy. Countries like Switzerland and the Netherlands mandate every one buy insurance, and fine people who refuse. Japan similarly has an individual responsibility requirement, but it is not enforced with a fine for failing to buy insurance. The individual who does not buy insurance is reminded repeatedly that they should buy insurance, and if they need to use a hospital, they are forced to pay the back premiums for the time they were uninsured.

From the perspective of American progressives, the best system is clearly the single payer model. Compared to other countries that primarily use private insurance, our private insurance companies are shockingly wasteful, predatory, and have done a terrible job keeping down costs. Providing everyone with basic health insurance from a program modeled after Medicare would save this country hundreds of billions on health care.

If single payer is not possible, a strong employer mandate with a strong social safety net is a distant second best choice. It builds on what we currently have in this country. Since the Senate bill provides for only pathetically weak regulator enforcement, and lacks mechanisms to hold the powerful private insurance companies honest, no individual should want to buy a policy directly from these private insurers. Employers should have some incentive to want to keep their employees healthy, at least more than the private insurance companies. Companies also have more power and sway when they stand up to the insurance companies than would one sick individual. The dangerous imbalance of power between the large private insurance corporations and a single ill policy holder is not properly addressed by the Senate bill.

In the context of this heath care reform effort, the individual mandate system is such an incredibly distant third that is not really desirable at all. I have no problem with adopting a Dutch style system, but the Senate proposal is just a massive corporate giveaway masquerading as a working system. The subsidies are insufficient. The required insurance is not standardized and is comprised of incredibly high cost sharing junk polices. The regular enforcement mechanisms are a joke, and the bill lacks a strong risk adjuster, public option, and repeal of the anti-trust exemption needed to keep the insurance companies honest. Until the government actually disciplines the insurance companies and provides everyone with access to truly affordable, high-quality health insurance, forcing people to buy a very bad private product is immoral.

The individual mandate is not necessary to achieve near universal coverage, despite what many are claiming. The goal can be achieved with a single payer system, or a real employer mandate combined with a good social safety net. Even if you insist on having an individual responsibility component, it does not need to be a fine collected by the IRS. You can have a system where, when people without insurance seek treatment, they must pay back premiums (or an amount out of pocket for the care up to a level equal to the back premiums) for a set period of time.

According to the CMS, the Senate bill will only get you to 93% coverage (whether that should even been defined as “near universal” is a debate for another time). Dropping the individual mandate would only result in extremely small reductions in the number of people “covered.” Hawaii has shown us this level of coverage can be achieved with only an employer mandate and a decent social safety net. If the individual mandate were dropped, and the final bill contained the House’s expansion of Medicaid to 150% FPL and a modified version of its strong employer mandate, it should result in a roughly equal or even greater expansion of coverage than the Senate bill. The current Senate extends coverage to and additional 31 million Americans, while the House bill would expand coverage to 36 million.

The individual mandate as designed is not critical to the bill and it definitely does not need to be passed into law now, four years before it would ever go into effect. The bill would provide an almost identical expansion of coverage without it. An even greater expansion of coverage could be achieved through several other means, including a larger expansion of public programs and a strong employer mandate. When people argue about how critical the individual mandate is, they are, in reality, arguing that powerful special interests really want it and will stop any other solution (big business does not want a real employer mandate, insurance companies and hospitals don’t want an expansion of public programs), so we must give in to their demands. They are arguing not that this is needed, but that it is needed if we want to retain the support of private insurance companies and hospitals. People deserve an honest debate about why we are implementing unpopular policies which are not truly necessary.

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is now living in the Washington DC area. He created a politics and policy blog, The Walker Report (