White House Office of Management and Budget Director Peter Orszag said today the penalty for not having health insurance will be plenty motivational for the uninsured to purchase coverage.
Speaking with reporters at an event sponsored by Health Affairs at the National Press Club, Orszag dismissed critics who say the fine that essentially mandates coverage will work because he believes it is more of an issue of being socially acceptable.
As an example, Orszag cited seatbelt use, saying that there is more adherence to seatbelt laws than speeding laws because of social norms.
Orszag argued that if someone got in a car and driver was a bit over the speed limit they wouldn’t complain, but a person would say something if the driver weren’t wearing a seatbelt.
He said reporters should remember the implementation of mandating coverage is more important than the amount of the penalty for not having it.
He said he disagrees with the “econ 101 approach to life” and cited the $750 fine in Massachusetts where coverage had a more “dramatic” increase than expected.
Orszag said advertising at Fenway Park was more important than the fine since it “created a social norm” and “everyone knew about it and you were expected to have insurance.”
Some lawmakers in the House have argued for a stiffer fine. As a candidate, President Obama argued the fine wasn’t the best approach since most people wanted health care coverage.As we reported earlier, Orszag indicated talks about various public option compromises were still ongoing.
Orszag said it would have been easier to push for a deficit neutral bill “that would perpetuate a system where [there is] inadequate attention to quality.”
He said the cost savings in the Senate measure in particular are real and dismissed critics who say they aren’t enough.
“The bottom line is the bill that is currently on the senate floor contains more cost containment and deliver system reforms … than any bill that has ever been on the Senate floor. Period,” he said.
Orszag was asked several times about the public option, and even why single-payer wasn’t considered from the get-go.
He said people aren’t paying attention to the bigger picture: “There are more than 30 million who will have health insurance because of this legislation.”
Reporters pressed Orszag on the House bill, and he stressed the Senate measure that’s currently being debated.
“Let’s let this play out,” he said when asked about the commission to evaluate Medicare cuts.
Orszag did not want to get into specifics as to which elements the administration most prefers in the health care plans. Instead, he focused on broad principles and history.
“We stand on the verge of a dramatic accomplishment,” Orszag said, adding later, “We are on the verge of a substantial accomplishment” and “we are further along in getting comprehensive health reform than we have ever been before.”