http://www.forbes.com/sites/aroy/20...nservative-history-of-the-individual-mandate/
...........Last October, prompted by a Wall Street Journal piece by James Taranto, I recounted how the Heritage Foundation was once the leading conservative advocate of the individual mandate. In response to various articles of this stripe, Stuart has published an op-ed in USA Today, in which he describes as a âmythâ the idea that Heritage invented the mandate. âI headed Heritageâs health work for 30 years,â he writes. âAnd make no mistake: Heritage and I actively oppose the individual mandate, including in an amicus brief filed in the 11th Circuit Court of Appeals to the Supreme Court.â He notes that his proposal struck a contrast with Hillarycare, and that Milton Friedman also called for an individual mandate:
The confusion arises from the fact that 20 years ago, I held the view that as a technical matter, some form of requirement to purchase insurance was needed in a near-universal insurance market to avoid massive instability through âadverse selectionâ (insurers avoiding bad risks and healthy people declining coverage). At that time, President Clinton was proposing a universal health care plan, and Heritage and I devised a viable alternative.
My view was shared at the time by many conservative experts, including American Enterprise Institute (AEI) scholars, as well as most non-conservative analysts. Even libertarian-conservative icon Milton Friedman, in a 1991 Wall Street Journal article, advocated replacing Medicare and Medicaid âwith a requirement that every U.S. family unit have a major medical insurance policy.â
My idea was hardly new. Heritage did not invent the individual mandate.
Stuart says that Heritageâs version of the individual mandate contained âthree critical featuresâ that distinguish it from Obamacareâs mandate: (1) it required people to buy catastrophic coverage, rather than more expensive comprehensive coverage; (2) it was primarily financed âthrough the carrot of a generous health credit or voucherâ¦rather than by a stickâ; (3) Heritageâs mandate âwas actually the loss of certain tax breaksâ¦not a legal requirement.â
In fairness to Heritageâs critics, itâs worth pointing out that: (1) Heritage proposed the individual mandate in 1989, well before Bill and Hillary Clinton were on anyoneâs political radar screen; (2) Obamacare and Romneycare both finance individual insurance purchases through generous vouchers (via the exchanges); (3) Obamacareâs mandate is âenforced,â weakly, by withholding tax refunds.
Why has Heritage changed its mind?
Stuart goes on to give four reasons why he and Heritage no longer support the mandate: (1) a mandate isnât necessary because âthe new field of behavioral economics taught me that default auto-enrollment in employer or nonemployer insurance plans can lead many people to buy coverage without a requirement;â (2) âadvances in ârisk-adjustmentâ tools are improving the stability of voluntary insurance,â as illustrated by the Federal Employees Health Benefits Program; (3) Obamacareâs mandate forces people to buy comprehensive coverage rather than catastrophic coverage; (4) Obamacareâs mandate is unconstitutional.
Stuart, of course, is perfectly entitled to change his mind, and the reasons he gives for having done so are ones Iâd agree with. (I would also point out, as I do repeatedly in this space, that the âfree riderâ problem is grossly exaggerated, and that an individual mandate actually increases free-riding.)
Many conservatives opposed the individual mandate
The fact that many prominent Republicans and conservatives supported the mandate does not, by any stretch, mean that conservatives did as a whole. Peter Ferrara, a Heritage Foundation alumnus, takes credit for âkillingâ the Heritage plan after he left the think-tank.
Ferrara correctly points out that a key flaw with the individual mandate is that the government is then required to define what types of insurance qualify for the mandate, and government will always be tempted to require costly, comprehensive insurance:
I had been close friends up until then with Stuart Butler, even double dating a couple of times with our girlfriends and then wives. Before he became Director of Domestic Policy [at the Heritage Foundation], Heritage had offered the job to then another friend of mine, Tony Pellechio. But I wanted Stuart to get it, because I thought Stuart was more hard core. So I talked Tony out of taking the job when he came to me to ask what I thought he should do. Sure enough, Stuart was next in line. Stuart does not know about this history almost 30 years ago to this day.
Stuart had no response to my objections to the individual mandate. But he was passionately devoted to the brilliance of the Heritage health plan. I told him it was so close to the Hillary plan, and so poorly framed as an alternative, that I predicted that President Clinton would come to point to it as the GOP alternative plan, and seek to get the Hillary plan passed as a compromise just ironing out the differences (employer pays or worker pays, generous health insurance or cheap health insurance).
Sure enough, a year later, as the Hillary plan was about to go down to defeat, President Clinton arose to point to the Heritage plan as the true GOP alternative, and offer to pass health reform by just ironing out the differences. Fortunately by then, I had already killed the Heritage health plan.
Well, I guess I wonât be going to Peter for job advice, but his policy critique of the individual mandate was correct then, and is correct now. And Stuart agrees with it.
In 1994 Sen. Don Nickles (R., Okla.) and Rep. Cliff Stearns (R., Fla.) turned the Heritage plan into a bill. Peter Ferrara and others, such as Tom Miller at the Cato Institute, rallied other conservatives against the plan. âBy endorsing the concept of compulsory universal insurance coverage,â wrote Miller, âNickles-Stearns undermines the traditional principles of personal liberty and individual responsibility that provide essential bulwarks against all-intrusive governmental control of health care.â
Ferrara convinced 37 leaders of the conservative movement, including Phyllis Schlafly, Grover Norquist, and Paul Weyrich, to sign a petition opposing the bill. âTo this day,â Peter writes, âmy relationship with Stuart Butler and Heritage has never recovered.â...................
