The Individual Mandate, a Brief History — Part II, The Republican Alternative (1993-1994)

By Bradley Latino
In Health Reform
February 16, 2011
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bl2When President Clinton announced his “Task Force on National Health Reform” in late January, 1993, Republicans (at least initially) felt the need to offer voters a conservative counterpoint. Their primary concern was countering the “employer mandate” proposals, which the right has long opposed as a job-killer. The stakes were raised when, for various reasons, the Task Force’s activities became a political liability for the new President. (The PBS Newshour’s website provides a useful timeline for the entire “Hillarycare” fiasco.)

Politicians on both sides recognized many of the same problems with American health insurance. But without employer mandates or government-run plans at their disposal, Republicans needed a more direct means of containing the cost of health coverage and protecting the insured from “free riders.”

Solutions from the Pauly and Heritage plans soon found their way into Republican- and Democrat-sponsored health bills-including the individual mandate that was vital to both. Lately, liberal pundits have been pushing this fact as some great dramatic irony: Republicans, some of whom are still in office today, loved the mandate back when it was an alternative to President Clinton’s proposals.

That’s a bit of an exaggeration. However much Republicans liked it, conservative legislators wanted to focus on how their bills would enable individuals to choose the insurance they wanted, rather than the consequences for failing to do so.

The “Health Equity and Access Reform Today Act of 1993,” sponsored by Republican Senator John Chafee, was probably the most thorough proposal of the bunch, and even enjoyed some bipartisan support. As has been noted, the bill shared several common elements with the ACA, and would have required all citizens and resident aliens to possess qualifying health coverage by 2005. (This is also the only bill I know of to call this requirement an “individual mandate.”)

Like the ACA, but unlike the think-tank plans or competing Republican proposals, the Chafee bill excludes those with religious objections from the mandate. This proposal didn’t so much enforce the mandate as attempt to make compliance financially attractive-only by possessing qualifying coverage could one take advantage of increased tax credits.

One rejoinder to this history lesson is that two bills without mandates, Representative Rick Santorum and Senator Phil Gramm’s “Comprehensive Family Health Access And Savings Act” and Representative Cliff Stearns and Senator Don Nickels’s “Consumer Choice Health Security Act”, were both more popular among Republicans than the Chafee bill. This is true insofar as neither bill contained a specific provision requiring Americans possess health coverage, but untrue in every other respect.

Based on the Heritage plan, the Stearns-Nickels bill terminated the employer health plan exclusion, and the medical expense and self-employed health insurance deductions. The tax credits and other benefits designed to defray the cost of health care expenses were withheld from those who failed to possess “federally qualified” coverage, as were both itemized health care deductions and even standardized deductions. The Consumer Choice Act would also have followed through with a version of the think tank proposals’ enforcement mechanism, creating state programs to provide coverage “to any individual who . . . who refuses to voluntarily purchase such insurance coverage privately.”[1]

As with other 1990s reform bills, the Consumer Choice Act didn’t devote a specific provision to spelling out an individual mandate; yet no less an authority than the Heritage Foundation considered the bill to possess an individual mandate as per their own design. Soon after the introduction of Nickels-Stearns, Heritage scholar and conservative health care guru Robert E. Moffitt delivered an eloquent and  detailed apologetic in its support. Moffitt’s reasoning would be echoed, years later, in the Government’s own defense of ACA § 1501(b).

The Santorum-Gramm bill was, at once, more draconian and less detailed than any competing proposal. Title VI of that bill stated that “Any individual with family income exceeding [100%] of the official poverty line[2] . . . but who fails to purchase [the required] coverage . . . within 1 year of the date of the enactment of this Act, shall not be eligible for the insurance pool program under title V of this Act.” Title V established subsidized insurance pools for those with pre-existing conditions. In addition, “No provision of Federal, State, or local law shall apply that prohibits the use of any statutory procedure for the collection of unpaid debts for medical expenses incurred by [these] individuals . . . .”

In other words, under Senator Gramm’s plan, not only would you suffer the same tax disadvantages in the similarly-structured Stearns bill, but noncompliance at any point apparently nullifies whatever bankruptcy protections that would help relieve medical debt. The uninsured and underinsured would also risk the possibility that a health condition would price you out of health coverage for either a year or until you aged into Medicare (the bill is unclear as to which). That may be a valid exercise of the commerce power, but it’s also begging a closer look at the Eighth Amendment’s use of the phrase “cruel and unusual.”

There were a few conservative and libertarian criticisms of these mandate proposals, but they were comparatively tame to what we hear now. Nobody seemed to consider the individual mandate a constitutional problem of any kind.[3] The main concern about Stearns-Nickels, it seems, was not that it required states to forcibly insure hold-outs, but that it permitted (but did not require) this by way of state-run plans. At a March, 1994, Heritage Foundation meeting, Senator Nickels promised to delete the provision. But neither Nickels nor Representative Stearns ever altered it.[4]

This disinterest continued even after Democrats reintroduced the “Health Security Act” in July, 1994. That bill had an express individual mandate, was authored by liberal superhero Ted Kennedy, and would have issued Americans spooky-sounding “Health Security Cards.” Amazingly, at the height of Newt Gingrich’s revolution against government overreach, not a constitutional concern seems to have been raised.

At any rate, all Republican bills were left for dead by the end of 1994. Various forces (including Bill Kristol’s infamous memo) convinced the party that any compromise on health care reform would be good for President Clinton and thus bad for them. Colorado senator Hank Brown went so far as to rescind his co-sponsorship of the Chafee bill a month before the midterm election. The problem wasn’t the individual mandate, itself, but its incompatibility with the new message: there wasn’t a health care crisis in America to begin with.

[Read “The Individual Mandate a Brief History–Part I, Conservative Origins“]
[1] Stearns-Nickels § 131(b).

[2] Note, the original text reads “exceeding 200 percent of the income official poverty line . . . or who is eligible for a partial or full credit to purchase a catastrophic health insurance plan under such section.”  Said tax credits are calculated as “100 percent reduced (but not below zero percent) by 1 percentage point for each 1 percentage point (or portion thereof) the qualified individual’s family income exceeds 100 percent of the income official poverty line . . . .”  Thus, if your income is 101% or greater, you’re subject to the bill’s penalties.

[3] William Saffire, Let’s Make a Deal on Health, N.Y. Times (May 23, 1994) (available online at http://select.nytimes.com/gst/abstract.html?res=F00713FC355C0C708EDDAC0894DC494D81&scp=10&sq=safire%20health%20care%20let’s%20make%20a%20deal&st=cse); Michael D. Tanner, Health Care Reform: The Good, the Bad, and the Ugly, Cato Institute Policy Analysis No. 184 (Nov. 24, 1992) (available online at http://www.cato.org/pubs/pas/pa184.pdf); Miller, supra.

[4] Tom Miller, Nickles-Stearns Is Not the Market Choice for Health Care Reform, Cato Institute Policy Analysis No. 210 (June 13, 1994) (available online at http://www.cato.org/pubs/pas/pa210.pdf).

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5 Responses to “The Individual Mandate, a Brief History — Part II, The Republican Alternative (1993-1994)”

  1. […] that matter, Newt spoke in favor of an individual mandate as late as 2009. Ask them what changed. By the end of 1994, they'd dropped it. Yup, given that, and the lack of any Republicans support, the idea the democrats (and a large […]

  2. […] in 1993, Santorum sponsored the Comprehensive Family Health Access and Savings Act with then-Sen. Phil Gramm (R-Texas), which […]

  3. […] debts for medical expenses incurred by [these] individuals”  As Bradley Latino continues in Health Reform Watch, under the Santorum-Gramm bill, not only would the person who does not have health insurance, s/he […]

  4. […] in 1993, Santorum sponsored the Comprehensive Family Health Access and Savings Act with then-Sen. Phil Gramm (R-Texas), which […]

  5. […] in 1993, Santorum sponsored the Comprehensive Family Health Access and Savings Act with then-Sen. Phil Gramm (R-Texas), which […]

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