Intellectual Backer Of Insurance Mandate Faults Alternatives

While some lawmakers and wonks are busy cooking up alternatives to the controversial federal mandate requiring people to have health insurance starting in 2014, one early backer of the approach insists it remains the best way to get more people covered at the lowest cost.

And, MIT economics professor Jonathan Gruber isn’t just any old mandate supporter. He’s an architects of Massachusetts’ insurance mandate program. And he also did a little economic modeling for the Obama administration during the debate that led to the passage of last year’s health overhaul.

Now, in a paper released by the liberal think tank Center for American Progress, Gruber revs up his estimating machine again to argue that the leading mandate replacements, such as penalties for people who delay buying insurance, wouldn’t do nearly as much to address the twin problems of coverage and cost.

How’s that? He explains:

“No alternative to the individual mandate can cover more than two-thirds as many uninsured as the Affordable Care Act does as passed by Congress and enacted into law. Second, no alternative to the mandate saves much money – even removing the mandate altogether, which cuts the number of uninsured covered by 50 percent to 75 percent but only reduced government spending by 25 percent to 30 percent.”

The key problem, says Gruber, is that without the mandate, healthy young people will be the least likely to sign up, which means that insurance premiums don’t go down because costs don’t get spread enough.

On the other hand, enticements to sign up short of a mandate like penalties for late enrollment or automatically enrolling people (but giving them the chance to opt out) would both likely end up with more people in public coverage and fewer getting insured on the job.

In the auto-enrollment options, Gruber figures, “8 in 10 newly insured are gaining coverage through government-provided insurance.” As a result, fewer people get coverage, but government spends about as much as it would with the mandate.

And Gruber points out that in Massachusetts, where there is a real world example of an individual mandate, insurance premiums are actually going down. “According to insurance industry figures, nongroup premiums have fallen by 40 percent in Massachusetts while rising by 14 percent nationally,” he wrote.

Oh, and has one more reason to stay the course on the mandate. With it, he writes, “we have an example to build on; alternatives put us in a much less clear world.”

Bonus Round: If this is all too complicated for you, take heart. Gruber is also working on a comic book to help explain the complicated health law to the common man and common woman, as our friends at WBUR’s CommonHealth noted Tuesday.