For months now, the individual mandate has been the most hotly debated portion of the PPACA, and has been the focus of court cases and ballot initiatives in several states. While many other aspects of reform are generally popular (like the provision to allow young adults to remain on their parents’ health insurance until age 26, and the requirement that all policies be guaranteed issue starting in 2014), the individual mandate has raised a lot of hackles, with people feeling that the government is infringing on their rights by telling them that they have to buy a product (and in most cases, that product will come from a private company).
In general, many of the opponents of the individual mandate have tended to consider themselves conservatives, but a few liberals – including Howard Dean – are now saying that health care reform could still work, without the individual mandate. (that article does contain an error however – Colorado voters rejected Amendment 63 last month, meaning that the people here did not approve a repeal of the individual mandate).
I’ve been in favor of the mandate from the beginning, simply because I view it as the simplest way to make sure that people aren’t able to game the system and wait until they become ill to purchase health insurance. I can see that there are other possibilities that might work, but I’m not sure if they would be as effective. We could set up an open enrollment period during which people could purchase guaranteed issue health insurance. Proponents of this sort of system note that we could either financially penalize late-comers (by charging them higher premiums if they enrolled at a time other than during the open enrollment window) or that they could just be on their own, with no option for health insurance if they didn’t enroll during the designated time frame.
But there are problems with both options. If a person opts to not purchase health insurance during the open enrollment window and chooses instead to wait until he needs health care before signing up, how would we determine how much additional premium he should have to pay? The only truly fair way to make it work would be to charge him back premiums for all the months he’s been uninsured, but it’s doubtful that many people could come up with that sort of money quickly, particularly if they waited a long time to enroll. What if the person had been uninsured for five years?
The other possibility – disallowing enrollment for anybody who doesn’t sign up during open enrollment – seems like it would be fraught with problems too. Are we ok with letting people die on the streets because they made a bad decision and opted to not buy health insurance? Probably not. Most likely, hospitals – particularly emergency departments – would continue to have to write off large bills incurred from treating uninsured patients. And what about children? If parents choose to not purchase health insurance for them and the children subsequently get sick, there’s much more of a moral obligation to treat a child who didn’t have the choice to purchase health insurance.
Health insurance – and really, all insurance – is about spreading risk. One person might go a lifetime with very little in the way of medical costs, while another person might need care that runs into the millions of dollars. Most of us have no way of knowing which category we’ll fall into, but having health insurance gives us a safety net in case we end up needing expensive care. The only way this works however, is if all of us – including the healthiest among us – are included in the risk-sharing pool. Although the individual mandate is highly controversial, it would be a way of making sure that nearly everyone is paying into the health insurance system, regardless of whether they are currently healthy or sick. If we don’t have a way of doing so, it stands to reason that either health insurance premiums will skyrocket (much more so than they have in the past), or that numerous health insurance carriers will simply stop offering health coverage, and focus instead on other lines of insurance.
