The Argument In Favor Of Health Insurance Mandate
SEARCH BLOG: HEALTH CARE
As the Supreme Court listens to arguments for and against the Affordable Health Care's mandate for personal insurance, it is interesting that the key point being made for a mandate is that everyone eventually requires health care so everyone should share the cost of coverage. That's what all insurance is for: spreading the risk. Some people will require more care than others and no one knows whether they will need extraordinary levels of care or not. So, since everyone requires health care, it follows that everyone be required to buy health care insurance coverage so that other people are not forced to cover the costs of caring for the uninsured... even if you feel you are healthy and can afford to pay for your medical services as needed. At some point, you will be unhealthy and you will not be able to pay for your medical services.
Of course, that's a generalization because nothing is inevitable except death and possibly taxes. Still, the odds say that you will need health insurance to cover the cost of your medical care... unless you don't. Then you are lucky because you didn't need your insurance which you didn't want and for which you were required to buy... but you might have needed it.
The point here is that nearly everyone will agree that having health insurance does give peace of mind and can be invaluable when you have a serious illness requiring expensive care. Yet there are a lot of people who don't buy the insurance because they can't afford it. They get by with state-run Medicaid programs and visits to hospital emergency rooms or inexpensive clinics. The cost of these "freebies" is borne, of course, by everyone else in the cost of their health insurance and taxes. So, why not force those who can afford insurance but choose to not have to have it? Then there will be more money to give to those who can't afford it.
But they are already receiving the care under the present system. It's just "under the table" forced payments from others. So, formalizing the hidden costs into visible costs really doesn't change anything, does it? Except, of course, the government makes you participate and the government dictates the level of coverage and care you can receive and the government can penalize you if you resist. You answer to elected and un-elected officials rather than the other way around.
So, the individual mandate doesn't really fix anything except the lack of 100% participation. It doesn't improve the number of choices or the level of care or the freedom to choose. It really doesn't do much except to let those who want to scam the system by paying a small fine relative to the cost of buying insurance then get insurance when they need it for a condition that existed before they got the insurance. Then the government can proudly say that you are covered even if you have a pre-existing condition that might be the reason for an insurance company rejecting you under the present system. Which means that the government can't really boast about 100% participation [unless you call paying a penalty "participation"] and insurance companies would really be screwed if everyone opted to pay the small penalty and get the expensive insurance... guaranteed... when they needed it for that heart transplant.
This then becomes another argument against the individual mandate: people who are responsible and comply with the individual mandate and those who presently are receiving some form of assistance by the states will not see an improvement in their coverage or treatment, but those who want really cheap insurance without paying the true cost of the insurance can choose to pay a penalty for much less and then get the insurance when they really need it.
The real argument against the health insurance mandate is that it is unconstitutional for the government to require you to enter into a contract to buy a product and penalize you for not buying such product. But we will have to wait for the U.S. Supreme Court to formalize that. And if they do, what are we left with? An imperfect, but workable system that has a built-in incentive to buy insurance before you get a pre-existing condition, but the freedom to decide if and how much insurance you will buy. Responsible people will continue to be responsible without threats from the U.S. government.
Oh, that penalty for ignoring the mandate: Impose an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who do not secure insurance; this will rise to $695, or 2.5% of income, by 2016. This is an individual limit; families have a limit of $2,085.
The average annual cost of health insurance: Average Annual Premiums for Family Health Benefits Top $15,000 in 2011
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