HERE'S a solid suggestion for how to fix the Affordable Care Act if the Supreme Court rules that mandating that citizens must buy health insurance is unconstitutional.

My fix would be to simply say raise everyone's taxes by what a health insurance policy would cost -- Congress definitely has the power to do that -- and then tell people that if they obtain insurance, they'll get a tax break of the same amount. So instead of a penalty, it's a perfectly legal tax break. But this seems to me to angelic pinhead density arguments about whether it's a payment to do something or not to do something.

The speaker is the guy who first came up with the suggestion of including an individual mandate in plans to reform the American health-insurance system. He's an economist named Mark Pauly, and he proposed the individual mandate idea to President George H.W. Bush in 1991 as a way to maintain a private free-market insurance system and avoid any move to single-payer health insurance. Ezra Klein interviewed Mr Pauly yesterday. As Mr Klein notes, the ideas Mr Pauly and a commission of academics suggested to Mr Bush ultimately made their way into Republican Senator John Chafee's 1993 health-care reform bill, which was presented as a conservative alternative to the plan developed by Hillary Clinton, and was co-sponsored by current Republican senators Orrin Hatch, Chris Bond, Charles Grassley and Robert Bennett.

Mr Pauly makes some pretty good points. For instance:

[T]he point of the mandate was that there are a few Evil Knievals who won't buy it and this would bring them into the system. In our version, the penalty was effectively equal to the premium of a policy. You paid the penalty and you got the insurance. That's one of my puzzlements here: In the new law, the actual level of the penalty is quite small compared to the price of a policy. It's only about 20 percent of the cost of a policy.

This has never quite made sense to me either, and I see it as a sort of failure of fiscal will. Basically, even with the subsidies envisioned in the ACA, health insurance is likely to remain fairly expensive for some groups of working-class people. Policymakers don't seem to have the political support to make the subsidies generous enough so that health insurance will be truly affordable for every group. But they can't envision actually forcing working-class people who don't feel it's affordable to pay the full premium.* So they're setting a penalty for failing to buy the insurance that, hopefully, will be high enough to convince people that it's better to pay the premium and get insurance, than to pay the penalty and get nothing. The cost of this approach is that it makes it unclear to citizens what they're getting. Mr Pauly's version is simpler: pay the minimum health insurance tax, and you get a basic plan. Buy your own health insurance on the private market, and you get the tax refunded to you. Universal health insurance, clearly constitutional, small fix to the current law. How about it, Mr Boehner? Yeah, right.

* I thought it might be useful to add a note on how those subsidies and mandates work in the fully-operational Dutch system, on which the ACA is modeled, because I happen to have experience with it. In the Dutch system, as under the ACA, every resident of the country must buy health insurance. All health insurance companies are private, but are heavily regulated and receive public subsidies, and they can't charge different premiums to different people, no matter how old or sick you are. They're basically competing purely on price, efficiency, and the desirability of the plans they offer, rather than by trying to skim the youngest, healthiest, least risky customers from each other. But, unlike Congress last year, the Dutch did have the fiscal will to provide enough subsidies so that premiums are quite affordable for everyone. Premiums in the Netherlands are about €1,300 ($1,750 dollars) per person per year for a standard individual policy, regardless of who you are. If you're poor, you get additional subsidies to help pay that premium. You can pay more if you want to get more coverage. For working-class people who make too much to qualify for special subsidies, €1,300 per year is a substantial expense, and Dutch people are constantly complaining about how expensive health insurance is getting. But by American standards, obviously, $1,750 per year for a full-featured policy is extremely cheap, unless you're a healthy person in your 20s, in which case you're basically free-riding off of older and sicker people who are paying the higher premiums the system needs to function.