Health insurance companies are for it. Ted Kennedy is for it. Nancy Pelosi is for it. Even some Republicans are supportive. What is “it”? “It” is a proposed requirement that would force every American to buy health insurance or face some type of fine or other punishment. “It” is more commonly known as the individual mandate, and “it” is terrible public policy.
1. Individual Mandates are an Unprecedented Violation of Individual Liberty – According to the Congressional Budget Office (CBO), a federal individual mandate for health insurance would be unique and unprecedented because it would “impose a duty on individuals as members of society” and would “require people to purchase a specific service that would be heavily regulated” by the government. CBO determined that among all of the federal rules, the requirement that all young men register with Selective Service is the closest legal requirement to an individual mandate. According to President Barack Obama HHS nominee Dr. Sherry Glied: “Developing a system to promptly identify and penalize scofflaws will take effort and ingenuity, particularly in our diverse and mobile country. It may require a degree of intrusiveness and bureaucracy that some will find unpalatable.”
2. Individual Mandates Will Not Solve Uninsured Problem – The number of Americans without health insurance is a problem that requires changes to public policy. The cost of care that the uninsured receive is passed on to the insured and drives up health care costs for all Americans. Mandates will not solve this problem. Evidence from state experiments with individual mandates suggests that people will still forgo insurance. A recent Health Affairs study of various legal mandates, including health insurance, found that the range of compliance varied greatly. In Massachusetts, the first state to enact an individual mandate with tax penalties and fines, the public authorities have already exempted approximately 60,000 persons from its terms.
3. Individual Mandates Will Not Solve Free-Rider Problem – Even people with health insurance still inflict significant cost shifting onto the health system. According to research by the Urban Institute, people who have health insurance account for at least 30 percent of uncompensated care delivered to the non-elderly.
4. Individual Mandates Are Expensive – From Obama appointee Dr. Glied: “Funds diverted from uncompensated care would not be sufficient to pay for the subsidies needed to cover most uninsured people. Eliminating the free-rider problem through universal insurance might make the health care system more fair, but it wouldn’t make it less costly.”
5. Individual Mandates are a Special Interest Bonanza – When government mandates that people purchase health insurance, it must define a minimum set of covered benefits that satisfies that mandate. Health care providers who wish to stay in business then must lobby Congress to make sure their products and services are included in the minimum benefits package. The mandate then becomes a means through which special interests use government to force transfers of funds from consumers to the health care sector.