Pollack on Krugman on Gruber on mandates

The “finding” that the Clinton health plan would provide essentially universal coverage that Paul Krugman touts in his column yesterday turns out to be a bare assumption.

Yesterday’s Paul Krugman column quotes a study by Jonathan Gruber of MIT, which Krugman portrays as a critique of Barack Obama’s health care proposal by comparison with Hillary Clinton’s.

Mr. Gruber finds that a plan without mandates, broadly resembling the Obama plan, would cover 23 million of those currently uninsured, at a taxpayer cost of $102 billion per year. An otherwise identical plan with mandates would cover 45 million of the uninsured — essentially everyone — at a taxpayer cost of $124 billion.

Since the Clinton plan contains not even an outline of how the mandate is to be enforced, I was puzzled about how Gruber managed to do his estimate.

RBCer Harold Pollack, a credentialed expert on health policy, having taken the drastic step of reading the actual study, gives us the answer: Gruber’s imagined Obama-like plan with a mandate achieves the feat of virtually universal coverage by … assumption.

Gruber:

In particular I assume that 95% of those who would not voluntarily choose to insure are forced to insure through the mandate.

[emphasis added]

So the “finding” comes out of precisely nowhere. Of course if the mandate succeeds, it will increase coverage, with most of the cost coming from the people paying those mandatory premiums rather than the [other] taxpayers. But the claim that it will actually succeed is based on nothing but an assumption. And yet no reasonable reader of Krugman’s column would understand that.

So we’re back where we started: two plans, both with guaranteed availability of insurance regardless of health status, both with subsidies. One has a mandate with (as yet undefined) enforcement mechanisms. The other has no mandate but (as yet undefined) financial disincentives for free-riding. Until the two plans are better specified, there is no basis on which to estimate how many people will wind up not buying insurance under either plan, and therefore no basis for any firm estimate of costs to the taxpayer.

This is hardly justification for the holy war the Clinton campaign is waging on Obama on the mandate issue.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com