Opinion: Government ‘mandates’ go beyond Obamacare

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An Op-Ed in Friday’s pages about Patient Protection and Affordable Care Act sparked a debate among readers on our discussion board. Here, the Op-Ed’s author, William D. Leach, replies to some of their comments.

Many of the critical comments on the discussion board dismissed my main argument, which the Opinion editors summed up nicely in the print edition: ‘The government encourages all kinds of purchases — why not health insurance?’ I wrote the article because I felt the public debate was overlooking the fact that government incentives, or ‘mandates’ if you prefer, are all around us. Here’s one more example: In California, we are subject to the do-all-your-shopping-at-Amazon.com-or-another-out-of-state-retailer-with-free-shipping individual mandate. Until Amazon begins collecting California sales tax in September 2012, people who shop locally will continue to pay nearly 10% more than Amazon shoppers. Is this a subsidy for people who shop on Amazon, or a penalty for those who shop at local retailers, or is it both? Subsidies and penalties seem like two sides of the same coin to me, with every subsidy effectively penalizing those who don’t comply with its requirements.

Several readers, like ‘Kurfco’ and ‘Mike_from_Dallas,’ fear that the health insurance mandate opens the door to unlimited regulation. It seems to me that we have already been living under this threat for many decades. The sky hasn’t fallen, but we have ended up with an overly complicated tax code full of loopholes and deductions. If the Obamacare mandate is ruled unconstitutional, I side with ‘puffbird’ who suspects the courts would then have to confront all the other subsidies and penalties that relate to purchases.

I also agree with ‘jhklat’ who says, ‘Calling out dozens of plainly wasteful government mandates in order to defend the latest one is hardly convincing.’ Taxes and subsidies can be powerful economic catalysts when they encourage people to make positive choices such as investment or self-education. But as ‘edwardskizer’ reminds us, ill-conceived subsidies can also encourage poor choices, like buying too much house with borrowed money.

Taxes and subsidies work best when they nudge fence-sitters in a positive direction, as do gas taxes by encouraging a few more people to carpool or buy efficient cars. Obamacare doesn’t fit this model because its goal is universal coverage, not a marginal change in behavior. As ‘affableman’ suggests, a much more simple and transparent approach is for the government to directly provide basic healthcare or basic insurance for everyone, such as by expanding Medicare. Direct provision is how governments supply other universal services like fire and police, K-12 education, and healthcare for the armed services. It works reasonably well. I’m not a fan of creating universal heath coverage through complicated tax penalties, but I think it’s better than no comprehensive health system at all.

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— William D. Leach