Should you be required to buy health insurance?
As lawmakers begin to hammer out the details of a health care reform bill, expect to hear a lot about “individual mandates” that require Americans to have health insurance, much like we’re compelled to buy auto liability insurance. We could purchase health insurance through an employer, a private insurer, or a yet-to-be-created public plan.
During last year’s Democratic primary, the issue of mandates was the biggest divide between Hillary Clinton and Barack Obama’s health care proposals, with candidate Obama campaigning against them then. Now President Obama has signaled he’s open to them—with some exemptions for some individuals and small businesses that can’t afford it.
The individual mandates are also the carrot that keeps insurance companies at the bargaining table—it’s their condition for guaranteeing coverage to all Americans regardless of preexisting conditions. And it would provide them millions of more customers. But is an individual mandate necessary for health reform?
An editorial by Linda Blumburg and John Holahan of the Urban Institute, just released in the New England Journal of Medicine argues convincingly that they are. The authors write that the current system encourages insurance companies to spend their money avoiding covering people with higher than average health risks, rather than developing more efficient ways of actually managing health care costs.
The authors point out that the most expensive five percent of the population accounts for about half of all health care spending, while the bottom 50 percent account for just 3 percent. “Because total health care expenditures are so concentrated,” they write, “the gains to insurers of avoiding the sick outweigh any possible gains from managing their care.” But a mandate for coverage would eliminate such adverse selection by covering almost everyone. And including healthy people in the pool of insured helps to pay for the sick people.
Significant funding would be necessary so healthy low-income Americans can afford to buy mandated insurance. Much of that funding can come from money that’s currently being spent on providing hospital, emergency and other uncompensated care to the uninsured. If the reform plan didn’t include a mandate many more people would remain uninsured, and those expenditures would not be available to be redirected.
For those who violate the mandate by failing to purchase coverage, the authors advocate that they should still qualify for care as if they were enrolled. But such patients would have to pay back premiums for the entire calendar year, plus a penalty.
As a consumer organization, we support health care reform that guarantees people will not face financial ruin just because they suffered a major illness or accident. One of the elements needed to make that promise real is a requirement that you have to participate in the health system by getting health insurance. However, such a system must be affordable, and low income and moderate income Americans will need to get help paying for their insurance.
—Kevin McCarthy, associate editor
To find out what we're doing to help fix the system, see our Guide to Health-Care Reform.
Posted by: General Insurance | Nov 21, 2009 2:28:14 AM
Thanks for your blog. You have been featured in the latest Bits of health Insurance .
Posted by: Greg | Sep 24, 2009 9:39:02 PM
If all citizens are required to have health insurance, what will keep the insurance companies from taking advantage? Is there any price control/regulation proposed? Should doctors be required to work for the Usual and customary for billing purposes and be preferred providers of all Government licensed health insurers? Who determines who can afford the health insurance and who cannot? Will there be the gaps in coverage that there are now between the "below the poverty level" and lower middle class groups? The lower middle class get hammered all around, and discrimination against single persons is not a new problem in the USA. Head of house hold status needs to apply to all singles who reside alone, as well as single parent households. Caps on insurance costs should be mandatory. Out of State insurance companies need to be allowed to insure people nationwide, and all insurance have to have preferred provider networks in all areas of the nation. Streamlining the network provisions through regulation is a Congressional concern. The usual and customary could be as set at an average of the rates currently used by medicare and major insurance companies, adjusted for inflation every three to seven years, and tied to the CPI.
Posted by: D. S. | Sep 17, 2009 2:49:49 PM
I think it is wrong to mandate people have to buy health insurance. If I had paid cash directly to the doctor for all the health care I've consumed it would be hardly anything compared to how much has been spent funneling money through an insurance company first. Why should a portion of my income be forcibly given over to some private company that stands between me and my health care? Those insurance companies are going to get a hefty say in how much income they're gonna get from me, but I don't have much say in how much income I get from my boss. And heaven forbid if I decide not to work for a while and do something interesting with my life or start my own business or something. Once again, regular people are getting screwed and this isn't reform or helping people it's just another giveaway to a powerful industry group with a huge guarantee to keep us regular working folks enslaved by our jobs, afraid to do anything else with our lives.
Posted by: Spectralblue | Sep 10, 2009 11:37:13 AM
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082103033.html
Forced purchase of insurance by the Federal Government is unconstitutional. Period. Supreme Court said so in the case of FICA. FICA and Medicare taxes are GENERAL income taxes that go directly into the general tax pool in order to get around this problem of Constitutionality. The Feds cannot Constitutionally force anyone to purchase insurance, or a GM car, or anything else.
Posted by: Scru D. Public | Aug 20, 2009 4:34:24 PM
There is no incentive to work and pay bills anymore. Everyone else is getting a free ride.
I think I need a fake ID that says I am an illegal immigrant.
Viola, free healthcare
Posted by: john G | Jul 27, 2009 8:35:05 PM
OK to those people who dont believe they should not be mandated to purchase health insurance and do not have health insurance, youre crazy. If you get sick, heaven forbid, cancer or HIV, and cant afford to pay your Dr bills, guess what everyone else pays you tab. Most likely you will be forced into Medicaid anyways due to having a disability. Guess who pays your bill, we all do. Mandates affords everyone the access to affordable premiums.
To the people who exclaim I am healthy I will never need health insurance, your in denial. 99% of people just dont die in their sleep one day just because they are healthy and it is simply just their time without some sort of underlying medical condition. At somepoint in your life you will need medical care hopefully later rather than sooner but someday. And someday someone will have to pay for that care, we should all be equally responsible in paying for that care. Some people, not all, when left to their own device in accepting personal responsibilty in financial matters ignore it even when they have the means to be self supporting. Regardless of which version of healthcare makes it before the President we should all be for health care reform.
I am tired of paying high premiums because of other peoples lack of responsiblity.
Posted by: The Truth | Jul 21, 2009 3:52:42 PM
Here is the fraud being perpetrated on all of us: Americans do NOT need health insurance. They need health CARE. Insurance is GAMBLING. You bet an event will occur; I bet it will not. Then the die are rolled. GAMBLING has no place in health CARE for Americans. Eliminate health insurance. Next, make all medical school education free, paid for by the U.S. Government once a student is accepted at an acredited med school and so long as they make the grade and succeed. Then, after graduation, ALL med grads serve two years in a military field hospital located in communities around the country giving FREE health care. Offer doctors incentives to remain after their term. The rest of medicine is paid for privately by those with the resources. End of the lie we are being sold by the president and politicians, bought and paid-for by the gambling, er, INSURANCE companies.
Posted by: doris | Jul 21, 2009 2:32:35 PM
As a health care professional who has been around to see the benefits and pitfalls of Medicare and Medicaid, I am concerned that not enough thought and good planning is being put into the current program. There is so much good about Medicare and Medicaid, however, there is so much waste, fraud that these need to be addressed before we create more problems. I see a decrease in coverage, rationing, and an increase in cost to the users because these problems are not being adequately addressed. I have had to deal with some these problems both personally and professionally and have found getting answers difficult. Do not endorse a one payor system! Let us make this right, not just convenient and hurried.
Posted by: mort | Jul 21, 2009 1:53:05 PM
now what about us people who don't need insurance? my medical expenses for the last 15 years...yes, FIFTEEN years, have amounted to exactly $632.71. all of which i paid out of my pocket. but you also have to understand a couple things. first, i'm not one of those whack-jobs that goes running to the doctor every time i need a drug fix (i've always thought it was funny that doctors whine and cry about people smoking, but they are all too happy to whip out the prescription pads and give people all the drugs they want, but that's another argument). second, i'm not one of those whiny little crybabies that goes running to the doctors office or er for every little sniffle or booboo. now i'm not opposed to getting a catastrophic policy to cover me in case i walk out my door tomorrow and, say, get struck by lightning or hit by a gas truck...but to spend $400.00 to $600.00 per month for a policy that will only cover part of the cost to go get a few stitches is completely ridiculous. and can i buy just a catastrophic policy? oh no. you have to take the whole thing whether you want it or not. and don't even use the "well what about the people who want it but can't afford it" argument. that is my problem exactly how? so i should be penalized cause someone else can't afford it? it's people like me that are the reason the whack-jobs want this required...so those of us who don't live at the doctors office can pay for the ones who do. well i am NOT responsible for anyone but me and it is NOT my responsibility to make sure every tom, dick, and jane who gets cancer or diabetes is taken care of. just like if i were to get cancer or diabetes...it's no-ones responsibility but MINE. i will say this though, if we are forced to get health insurance, a good size group of us (and growing) will be going to the local er EVERY DAY...seven days a week, 365 days a year until we die, for every petty little thing, every little ache or pain or sniffle or booboo...even if we have to make something up. this will also include daily visits to the doctors office.
Posted by: anti | Jun 25, 2009 10:17:57 PM
If you want to guarantee me an income, then sure, I could deal with being required to buy insurance.
But I do mean GUARANTEE INCOME. And not just measly "unemployment insurance", but substantial income that preserves my quality of living, and ALSO covers the premium portion of the absurd prices that health insurance companies charge. If you're not willing to do that, then I must retain the right to preserve my capital as I see fit.
Posted by: Larry | Jun 23, 2009 1:54:59 PM
You'll end up like Canadians and Europeans;low GDP, high taxes, no individual money and socialists; you elected the Dems, you get what you deserve
Posted by: eric | Jun 22, 2009 2:22:56 PM
E. Nowak - you don't get it. There is a very telling section in the article:
"And including healthy people in the pool of insured helps to pay for the sick people.
Significant funding would be necessary so healthy low-income Americans can afford to buy mandated insurance."
As in ALL socialized programs, all of the earners/producers have to pay for all of those who don't earn/produce. This is simply wrong, and as was stated by the other poster, goes against the USA Constitution. This country affords the right to work toward attain a better life, it doesn't guarantee it. NO country can do that.
Posted by: E. Nowak | Jun 21, 2009 1:10:53 PM
Yes, yes, yes!
I live in a auto insurance mandated state, and being able to drive isn't nearly as important as health. Everyone thinks this is a good idea -- except irresponsible people who don't want to pay for ANYTHING.
Posted by: Wilfred Olschewski | Jun 21, 2009 12:46:10 PM
The uninsured get billed at a much higher rate, often double or triple what is paid by insurance companies and Medicare/Medicaid. That alone is enough incentive to buy insurance, but we could provide additional incentives.
Forcing people to buy medical insurance, especially by the Federal Government, is clearly unconstitutional. Its not in the enumerated powers, nor can it be justified by the Interstate Commerce Clause. What is next? Mandatory treatment i.e. Kimo Therapy for cancer. Should the Federal Government own our bodies?