You make a strong case for mandates. However, I cannot imagine a mandate for catastrophic coverage only. Most people do not consider catastrophic coverage as health insurance. They prefer the coverage equivalent to using auto insurance to pay for gasoline. The rats have encouraged this thinking for a long time. The rats will not allow any mandate just for catastrophic coverage. I understand that the law in Massachusetts contains many mandated coverage areas beyond catastrophic care. The rats view universal health insurance as another opportunity for a new entitlement. They will only use the free riding issue to justify a new entitlement.
This is why the road to health reform lies in tax reform. So long as the federal tax system subsidizes health insurance, it’s more rational to prefer subsidized insurance over paying for the same care out-of-pocket (even though the former creates a tragedy-of-the-commons outcome that everyone is worse off from the consequent moral hazard, excess pricing and excessive technology growth that ensue, from the standpoint of the individual consumer, it is still rational to prefer subsidized insurance coverage).
HSAs are finally creating a more level playing field between insurance and out-of-pocket costs and every year, more and more consumers “get it” by shifting into these. So either with sufficient critical mass of consumers in such plans and/or eradication of the tax exclusion, I can imagine a world in which the mandate is defined in a way that HSA plans qualify and even rats will be forestalled by the prospect of tens of millions of enraged Americans from trying to make the mandated coverage more comprehensive.
The little understood flip side is that the road to tax reform lies in health reform: a $200 billion annual tax expenditure for employer health coverage is ludicrous and indefensible, but if you get rid of it, the number of uninsured would climb by 50%. So this vastly complicates efforts to move towards a substantially more efficient consumption-based or flat-tax system. But the second strike against such efforts is that rats generally oppose them on grounds they are inequitable/regressive. I’m willing to kill 2 birds with one stone by offering “universal coverage” (operationally defined as an individual mandate for catastrophic coverage) in exchange for their agreement to move to a consumption-based or flat tax system. The “rich” will “lose” by elimination of the tax exclusion, but will gain by the shift away from income taxes; the “poor” will do the opposite. Net equity will be largely unchanged, but we’ll have gained vastly more efficient tax and health care systems that together arguably would add $1 trillion to the economy every year [a combination of $500 billion in efficiency losses that CBO attributes to the income tax system and a substantial reduction in the 20-50% of our 2.4 trillion health care system that experts say is now wasted].
Mitt Romney is being advised by Allen Hubbard on health care. Leaving aside any drawbacks he might have on other issues, I believe that of all the candidates in the field, he’s the only one with the potential vision and political skills to cobble together such a grand compromise. If he did nothing else but tax reform and health reform during 4 years in office, he’d still go down in history as one of the greatest presidents.