There seems to be a disastrous riptide brewing in the establishment debate over healthcare reform. The simultaneous development of pressures to push what's called an "individual mandate" (where you are required by law to purchase coverage), and the potential subversion of a real public-plan option.

That is a precariously dangerous pair of opposing compromises.

The individual mandate without price controls at the provider level is a de facto government enforced racket. By where the government will compel people to pay a private for-profit corporation for services rendered, and often poorly. This is as antithetical to “cost-control” as one could conceive. It's a captive market, thus a perverse market, and a market which is already rendered almost absurdly perverse by its essential inelasticity of demand (up to the point that the institution is just rejected wholesale to the detriment of everybody). Somewhat thankfully, this condition is recognized by our representatives, but the problem is their solution to it; tax deductions and rebates.

The thinking goes: if we're going to force everyone to buy it, then we have to provide some assistance in purchasing it.

On the surface it seems sound. The problem, however, is that such assistance without controls at the provider level will render the assistance moot. Save for some price stickiness in the short-term, the presence of the subsidy to tax payers will simply be rolled into the price of the coverage; making it a de facto subsidy to the insurance companies (which begs the question why already immensely profitable corporations should receive subsidies). In short, it will just induce spot inflation in healthcare prices; almost ironically the exact opposite outcome purportedly underlying today's renewed focus on healthcare reform. In shorter, we'll be right back where we started in no time, and presumably with even fewer tools to make fundamental changes.

If the government is going to compel us to purchase something, then it should do so by providing the pay-for service directly. Thus achieving the simultaneous provision of accountability to the public and avoiding the hazard of enriching private enterprise via the force of law. If we end up with both an individual mandate and no legitimate public-plan option, then we will truly have the very worst of all worlds. We need to make sure that we get lock-step legislation on this; that an individual mandate is enactable iff (if and only if) it is accompanied by a legitimate public plan option.

Cross posted at Oxdown Gazette.