POLITICS

What did the mandate buy Obama?

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Politics,Beltway Confidential,Conn Carroll

Last week, just about every conservative commentator wrote a version of the same article on the individual mandate's true role in Obamacare. The New York Times Ross Douthat distilled it best:

But the mandate is actually a more political sort of marvel. In the negotiations over health care reform, it protected the Democratic bill on two fronts at once: buying off some of the most influential interest groups even as it hid the true cost of universal coverage.

This formulation irked many on the left including The Washington Post's Ezra Klein and BuzzFeed's Ben Smith.

Klein insists that the mandate was designed to appeal to Republicans, not the insurance industry. But at some point in 2009, definitely by October at least, it should have been obvious to the White House that the mandate was not going to entice any Republicans to sign off on the biggest expansion of government since the New Deal. In fact, if anything, it was losing them votes.

Sen. Olympia Sonwe, R-Maine, cast her only vote for Obamacare in committee only after Sen. Max Baucus, D-Mont., agreed to weaken the mandate. By the time the bill moved out of committee and onto the Senate floor, it was obvious there was zero bipartisan interest in health reform built around what Ezra calls “personal responsibility” and private health insurers. But the White House stuck with the mandate anyway. Why?

Smith complains that Douthat just has his facts wrong about industry support for the mandate. He tweeted out a "rebuttal" to what he calls "the myth" that the mandate "effectively bought off the insurance industry."

Yes, AHIP did eventually help fund a Chamber of Commerce run television attack on Obamacare. But that only came after Baucus weakened the mandate in committee. Throughout the summer, AHIP not only cautiously supported Obama, they actually ran ads in favor of his health care plan. Here is the USA Today from July 2009:

As long as the bill keeps a requirement that everyone have health insurance, which would help defray insurers' costs because millions more would be paying premiums, then the "consumer protections" Obama outlined "are going to be in there," said Robert Zirkelbach of America's Health Insurance Plans. He said insurers support the measures Obama described.

"We agree that everybody should be able to get coverage," Zirkelbach said, but "to make these reforms work, there has to be a requirement that everybody participate."

And even after AHIP did decide the mandate was too weak to merit their support, they still pulled their punches in opposition. Businessweek reported in 2010:

America's Health Insurance Plans, the group's Washington lobby, led the effort to kill President Bill Clinton's health care plan in the 1990s with its famous "Harry and Louise" TV ads showing a couple fretting over a new "billion-dollar bureaucracy."

This time around, the industry's early support for the overhaul was seen as proof that Democrats had the wind at their backs.

The insurance industry changed course last fall, running ads against the overhaul, after it decided the Democrats' plan wouldn't bring enough healthy new patients into the system to balance increased medical costs. But analysts say insurers' rhetoric doesn't match their actions.

"It doesn't look like they're in the fight of their lives," said Les Funtleyder, an analyst with financial firm Miller Tabak. "If you remember the Clinton days, there was a 'Harry and Louise' ad on every couple of minutes. We're not seeing that anymore."

So, what did the mandate end up buying Obama? Zero Republican votes as well as delayed and muted industry opposition.

More important is the second half of Douthat's formulation that neither Smith nor Klein address: "it hid the true cost of universal coverage."

As Cato's Michael Cannon explains, the mandate was instrumental in keeping the CBO score of Obamacare under $1 trillion. And, as we've noted before, without a sub-trillion number, Obamacare would never have become law.

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