Howard Dean is Dead Wrong on Obamacare's Individual Mandate

Howard Dean, 2004 Democratic presidential candidate, former Vermont governor and former DNC chair, has a regular gig appearing on CNBC. In one such appearance, he said today that the individual responsibility provision of Obamacare was unnecessary and would hurt Democrats in next year's elections.

Gov. Dean is wrong. He didn't explain his argument much, but from what I can saw together from his previous statements and campaign (his 2004 campaign was what brought me to politics), his argument revolves around his experience in overhauling Vermont's health insurance market as governor, which he admitted did a great job at. Dean has often argued that because Vermont was able to achieve close-to-universal coverage without the individual mandate, the rest of the country would be, too.

Except that Vermont isn't exactly like the rest of the country, nor was what Dean did in Vermont possible in the US Congress. 92% of Vermonters had health insurance when Obamacare was passed into law, and while high, the rate has been pushed up to 93.5% thanks to Obamacare even before the exchanges took effect. Even so, Massachusetts, with nearly the same requirements on the health insurance market, has an insured rate of 96.1%. The difference? The individual mandate, which Massachusetts has but Vermont does not.

And as John Gruber pointed out during similar rants by Dean during the passage of Obamacare, Massachussetts residents also enjoy broader coverage and more choices than Vermonters. For a 45 year old male, Professor Gruber points out, the Massachusetts marketplace offers 41 choices of plans to Vermont's 6, and plans with comparable plans have a smaller deductible in Massachusetts.

Some might point to the fact that Vermont has a smaller pool overall, with a population of only about a half a million to Massachusetts's 6.5 million civilian non-institutionalized population, as the reason why Vermonters' choices are more limited and more expensive. Those who claim this point are partially correct, but they also - perhaps unwittingly - concede a crucial point: Vermont's semi-successful model cannot be extrapolated onto much bigger, more diverse states.

Let's consider the example of another northeastern state: New York. Health insurance premiums have plummeted in New York, driven by Obamacare, but more specifically, driven by the individual mandate, a Kaiser study found in July. Premiums have dropped in the state by as much as 50%, and nearly all of it is attributable to the individual mandate. How so?
But the main thing that’s different about New York is that the state passed many of the health insurance reforms that are part of Obamacare (along with some that are not) many years ago, only without an individual mandate.

“New York is like the poster child for why you need an individual mandate,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reform. “They implemented all the reforms without the individual mandate, and premiums just went through the roof.”
While the drop in premiums experienced in New York are unlikely to be replicated in any other state, that isn't really the point. The New York example isn't here to show that the individual mandate by itself cuts premiums in half. What the New York example does show us is that all of the well meaning and popular reforms of the Affordable Care Act - guaranteed issue (no more pre-existing conditions) and community rating (no hiking premiums because you got sick) - would result in spiking cost were it not for the individual mandate.

Logically, this is well understood. Without the mandate, young and healthy individuals may well choose to stay out of the market. Heck, anyone could choose to stay out of the market until they became ill or suffered an injury. In small, rural, relatively monolithic states like Vermont (the state is still 94% white), that may be less of a reality, but it is a reality that need to be dealt with when considering large, diverse and largely urban populations (which is where most of America lives).

I would also be willing to bet that Gov. Dean didn't have to deal with groups in his state actively discouraging people from getting coverage, as is the case now - and that campaign may well be successful absent a legal mandate.

Speaking of which, what about Gov. Dean's political argument - that the mandate will hurt Democrats in 2014 because people "don't like being told what to do" by the government? In a vacuum, that's true. But the Republicans have already fought an election when the issue of the mandate had the highest attention, having just had a Supreme Court ruling holding it constitutional, and they lost badly.

Largely because it is misunderstood and poorly explained, people may still well remain opposed to the mandate. However, a referendum on Obamacare will not just be a referendum on the individual mandate. It will be one on whether health reform has improved the lives of millions of Americans. The question will not be whether they want the individual mandate. It will be whether they want to keep the protections of the ACA: ensuring insurance companies cannot drop you when you get sick, that they cannot reject you because you are sick, that they must allow parents to keep their young adult children on their plans.

The question will be whether the word-of-mouth stories millions of newly insured - both through Medicaid and private plans in the exchanges - and millions more who are finally able to use their plans, will overwhelm the media narrative of the individual mandate in the vacuum. The question will be whether those fighting to protect their real benefits will overwhelm those fighting to deny those benefits. I have no doubt that it will. While he is at it, Gov. Dean should probably also disabuse himself of the notion that Republicans would suddenly leave the ACA alone if it didn't have the individual mandate in it. Health reform will not turn on the political point-scoring of pundits but on the real differences it makes in millions of lives.

I have said it before and I will say it again: the path to Democratic victory in 2014 will not lie in running away from Obamacare but in wearing it as a badge of honor.

As for Howard Dean, in whom I have been thoroughly disappointed, I will just say this, as someone who was royally screwed by a destructive media meme (as they played the "Dean scream" out of context over and over), he should know better than to become part of another one.

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