health insurance

A Health Insurance Mandate With a Choice

(THE NEW YORK TIMES) - DESPITE President Obama’s letter on Tuesday offering to consider several Republican health-care provisions, hope for bipartisan progress on the issue has quickly faded. Republicans have already dismissed the changes as merely cosmetic, and the president has signaled his support for passing the final changes to the legislation through the budget-reconciliation process, which would require only Democratic votes.

But the Democrats could modify one key provision of their legislation — the mandate that individuals buy insurance — in a way that goes to the heart of conservative and libertarian objections.

President Obama clearly stated the rationale for the mandate at the last week’s health care forum. If Congress merely banned exclusions for pre-existing conditions, healthy people would have no reason to buy coverage until they got sick, and the insurance system wouldn’t work. So in addition to offering subsidies to enable people to afford coverage, the Democratic reforms impose tax penalties on those who remain uninsured — $695 a year or 2.5 percent of income, whichever is greater, under the president’s proposal.

There is another way, however, to accomplish the same purpose: let individuals opt out of the new insurance system, without a penalty, by signing a form on their tax return acknowledging that they would then be ineligible for federal health insurance subsidies for a fixed period — say, five years.

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