Thursday, March 8, 2012

Individual Mandates, Freddy the Freeloader, and Health Care

Rick Santorum has been beating Mitt Romney over the head with the proverbial cane over his support for Romney Care in the state of Massachusetts during his term as Governor.

The main culprit?  'Romney's support of 'individual mandates' for everyone to be included in the system.

What is an 'individual mandate' anyway?

An individual mandate is a requirement passed by government that requires you as the citizen of that governing state or nation to 'buy' something just because you live in that state or nation.  It is the quintessential issue over what is, or is not, a dispersed, smaller government in the original Federalism scheme where most decisions are pushed down to the lowest possible entity such as the city council or state legislature.  Ronald Reagan ran on the platform of 'New Federalism', for example, extolling the Jeffersonian virtues of 'local governments making local decisions, not Washington.'

Passing 'individual mandates' at the federal level is a very hard thing to do.  The Founders wanted to make it difficult, and they did.

The federal income tax of Civil War days was found unconstitutional by the Supreme Court in 1895 because it was an 'individual mandate' in the form of a direct tax and not apportioned by the state population as dictated in the Constitution.  Article I, Section 2, Clause 3 says:

'Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers.'

People at the beginning of our Republic were fearful of the direct tax mechanism because it reminded them so much of the capricious nature of the King of England, George III.  Excise taxes could be avoided; you just do without the items to be taxed.

Direct taxes could not be avoided. Ever.

But with the passage of the 16th Amendment in 1913, all those concerns about 'capricious' taxation by a governing authority were set aside by our grandparents and great-grandparents and we have never had any problems with an overly-ambitious federal government taxing authority ever since.  (in your dreams, maybe)

Aside from that, the next direct individual mandate from the federal, nationwide level to rear its ugly head didn't happen until the passage of the so-called Obama Care in 2010.  That is right.  2 times in over 223 years, the US government has passed a serious 'individual mandate' to 'force' people to do something like pay taxes directly to Washington, not based on the apportionment clause.

The first was rectified by the passage of the 16th Amendment through the constitutional amendment process. Perhaps that means that Obama Care will need a constitutional amendment as well to be, well, 'constitutional'.

But the states, as in Massachusetts where Governor Romney served as chief executive, they are not beholding to the same restrictions on 'individual mandates' as the federal government supposedly has been until Obama Care was passed.  

You have 'car insurance', don't you?  Well, that is an 'individual mandate' at the state level that says: 'If you want to own and operate a car and get a driver's license within the borders of this state, you have got to buy car insurance from Geico or that annoying 'Flo' from Progressive or else, you can not own and operate a vehicle here'.

We are sure there are other examples.  We just don't have them handy this morning.

States can do that sorta thing.  The federal government can't.  Supposedly.  Unless you are in the Obama Administration or were in Nancy Pelosi's office when she famously said: 'We have to pass the bill to see what is in it' as if it was some sort of jack-in-the-box from which she didn't even know what would pop out when cranked.

Back in the early 1990's, when we were still on Capitol Hill, former Congressman Alex McMillan was a key player on health care reform on the House Health Subcommittee, the Budget Committee and the Leader's Task Force on Health Care Reform.  Mainly because he understood the basic differences between Medicare and Medicaid, and then some, along with others such as Bill Gradison of Ohio, David Hobson of Ohio and John Kasich of Ohio.  (How come so many Ohioans knew what they were doing on health care?)

They even met with First Lady Hillary Clinton and her Hillary Care team many times, one time most famously in the backyard of now-Ohio Governor John Kasich for hot dogs, hamburgers...and plenty of beer.  Now that was some kinda cookout!

Our point in bringing all this up is that we can not remember one single Republican back then opposing any form of 'individual mandates'.  Why?

Because Republicans were more concerned about the 'free rider' issue or the 'Freddy The Freeloader' case where people don't pay for their own health insurance but show up at the hospital emergency room with Stage 4 cancer and then the taxpayer and others who do have insurance wind up paying for that person who has never paid for their health care insurance.  Just like what hapens today, as a matter of fact.

And they were mostly the young, healthy people we were most concerned about.  You know, the strong healthy young strapping male of 25 years of age all full of vim and vigor who think they are immortal and invincible so they would never buy health insurance if not mandated to do so and somehow they get into a car wreck sadly and then spends 10 years on life support, all supported by someone else.

Here's our deal: 'Why not start all over and find a way to help every man, woman and child buy catastrophic health insurance coverage with the existing resources we have today in Medicare, Medicaid, VA, federal military health care and tax expenditures?'

'Cat Coverage' we could call it and it is far, far, far less expensive on a per person basis than the current system that pays every billing for a hangnail and then assumes you are committing attempted fraud if you file for it.

Cover everyone against the truly disastrous financial outcomes from cancer, stroke, car wrecks and gun shootings and then figure out private sector solutions to covering the other costs during the year.

The percentage of people every year who have such catastrophic bills are tiny in comparison to the general population which is predominantly healthy each year for the most part.

That is the way to go.  Do it such that the individual mandates happen at the state level, where states have the flexibility to do such things, not at the federal level where it becomes 'constitutionally problematic' to say the least.

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