Health insurance mandate

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A health insurance mandate is a type of individual mandate by which a government requires that its citizens purchase health insurance or face a monetary fine.

The purpose of the mandate is to solve the adverse selection problem often faced by insurance companies, by ensuring healthy individuals purchase insurance and thus broaden the risk pool.^[1] However, empirical evidence suggests that the threat of adverse selection is exaggerated,^[2] and that risk aversion may balance it.^[3] Without mandates, for-profit insurers necessarily rely on risk aversion to charge premiums over expected risks, but are constrained by what customers are willing to pay; mandates eliminate that constraint, allowing insurers to charge more.^[4]

Contents 1 European health care systems 2 Asian health care systems 3 South American health care systems 4 United States health care system 4.1 United States national debates and arguments 4.2 Public opinion 4.3 State systems 5 Employer mandates 5.1 Asian health care systems 5.2 South American health care systems 5.3 United States health care system 5.3.1 United States national debates and arguments 5.3.2 Public opinion in the United States 6 See also 7 References 8 External links

[edit] European health care systems

This section requires expansion.

In Switzerland, the nation's health care system features a mandate that individuals choose from a menu of plans offered by private insurance companies. Premiums are not linked to incomes, but the government provides subsidies to lower-class individuals to help them pay for their plans. About 40% of households received some kind of subsidy in 2004. The system has virtual universal coverage, with about 99% of people having insurance. The laws behind the system were created in 1996.^[5]

A recent issue in the country is their rising health care costs, which are higher than European averages. However, those rising costs are still far less than the increases in the United States.^[5]

[edit] Asian health care systems

This section requires expansion.

[edit] South American health care systems

This section requires expansion.

[edit] United States health care system

[edit] United States national debates and arguments

The idea of a mandate is a contentious political issue in the United States.^[6][7]

Though in 2008 then-Senator Barack Obama campaigned against requiring adults to buy insurance,^[8] in July 2009 President Obama reportedly "changed his mind" and announced that he was "now in favor of some sort of individual mandate as long as there's a hardship exemption."^[9] Supporting an individual mandate, Obama said, "I've been persuaded that there are enough young, uninsured people who are cheap to cover, but are opting out. To make sure that those folks are part of the overall pool is the best way to make sure that all of our premiums go down."^[10] However, the Congressional Budget Office found that the effect of broadening insurance coverage "would probably be relatively small and would not directly produce net savings in national or federal spending on health care."^[11]

A 2004 editorial in USA Today asserted that United States Department of Health and Human Services (HHS) data show the uninsured are unfairly billed for services at rates far higher—on average 305% at urban hospitals in California—than are the insured; USA Today concluded that "millions of [uninsured patients] are forced to subsidize insured patients."^[12] The Wall Street Journal reported that mandates squeeze "those in the middle" in Massachusetts and that nationally CBO estimates "as many as nine million legal American residents might still go without insurance under the initial House legislation released in July, despite its subsidies."^[13] The Los Angeles Times reported in 2009 that current proposed mandates without cost controls "add up to higher costs for taxpayers and consumers."^[14] The Washington Post reports that even with mandates insurers will likely continue discrimination to "chase away the chronically ill," quoting Karen Pollitz, research professor at the Georgetown University Health Policy Institute: "The race is to the bottom."^[15]

National Nurses United, the nation's largest registered nurses organization and a supporter of Medicare-for-all, ranked the individual mandate first in a list of 10 problems explaining their opposition to the current Congressional proposals.^[16] The California Nurses Association, which supports single-payer healthcare, added that due to "insurance company pirates and their predatory pricing practices...subsidies and tweaking will amount to little more than an umbrella in a hurricane."^[17] Physicians for a National Health Program, which also supports single-payer healthcare, wrote that "mandate-based health reforms don't work."^[18]

Citing data from the Urban Institute and the experience of Massachusetts (see below), the Cato Institute argues that without the uninsured, "The insured would pay more, not less."^[19] The Pacific Research Institute argues that the uninsured subsidize the insured, do not drive up the cost of health care, and use fewer services than the insured.^[20]

There is also disagreement as to whether federal mandates would be constitutional,^[21] and state initiatives opposing federal mandates may lead to litigation and delay.^[22][23] In 1994, the Congressional Budget Office issued a report describing an individual mandate as "an unprecedented form of federal action." The agency also wrote, "The government has never required people to buy any good or service as a condition of lawful residence in the United States."^[24]

The insurance mandate faces opposition across the political spectrum, from left-leaning groups such as MoveOn.org, the Green Party, and other advocates of single-payer healthcare to right-leaning groups such as the Heritage Foundation, FreedomWorks, and the Cato Institute as well as some members of the U.S. Senate and House of Representatives.^[7][25][26] In the Senate Finance Committee, Republican Jim Bunning of Kentucky has called a mandate 'un-American' and argued that it "may even be unconstitutional".^[27] Democratic Representative Dennis Kucinich, who sponsors single-payer healthcare, called President Obama's mandatory insurance proposal "the wrong approach" and a subsidy rewarding "the wrong people" including the insurance companies.^[28]

However, the idea has traditionally gathered support from insurance companies^[14] and central figures within the Republican Party (Charles Grassley, Mitt Romney, and the late John Chafee are examples),^[7] and was part of the defeated Clinton health care plan of 1993. Mandate supporter Larry Levitt, Vice President of the Kaiser Family Foundation (see Kaiser Permanente HMO), stated in a Kaiser Network "interactive web show" that the mandate has been at the heart of health care reform proposals in the United States.^[6] In the same Kaiser network show, Dr. Len Nichols, Director of the Health Policy Program at the New America Foundation, called an individual mandate an "absolutely necessary" pre-condition to universal health care: he stated that, without a mandate, only a maximum of about half of uninsured Americans would likely obtain coverage under any non-compulsory reform; he also stated that it creates a more fair system in which people with pre-existing conditions are no longer denied services or have the costs of their treatment shifted onto others, with more pre-emptive care saving money as well.^[6] Families USA, which does not disclose its donors but links to Kaiser websites,^[29] is the sole source for cost-shifting data cited by The White House.^[30][31] In October 2009, Kaiser Health News reported that "the mandate has become a target for both Democrats and Republicans" and stated, "The insurance industry is clearly worried about the mandate being defanged."^[32]

Opponents such as Michael Cannon, Director of Health Policy Studies at the Cato Institute, make a philosophical argument that people should have the right to live without government social interference as a matter of individual liberty. He has stated that federal, state, and local governments are not willing or able to raise the necessary funds to effectively subsidize people who cannot currently afford insurance. He has also stated that the costs of increasing coverage are far higher than other reforms, such as reducing the amount of errors and accidents in treatment, which would accomplish as much or more benefit to society.^[6]

Writing in the Huffington Post, Michael Moore criticized mandates as part of a "massive government bailout for the insurance industry."^[33] Consumer Watchdog (CWD) writes, "Requiring people to buy unaffordable and unreliable insurance policies is not the solution to the health care crisis;"^[34] CWD's John Simpson added, "Mandating that everyone must buy insurance from private companies simply guarantees huge profits for the industry."^[35]

On CNN, Lou Dobbs Tonight analyzed the financial costs of an individual mandate and quoted The Politico's Nia-Malika Henderson: "the individual mandate is really going to rub a lot of people the wrong way."^[36] Summarizing published sources of the debate from 2007 through 2009, James Joyner concluded: "Forcing Americans to buy health insurance regardless of whether they want it or can afford it is extremely controversial, with not only Republicans but most of the Democratic contenders for the presidency in 2008 opposing it."^[37]

[edit] Public opinion

A July 2009 survey by Quinnipiac University found that Americans reject the idea of requiring people to buy health insurance, with 51% opposed and 44% in support.^[38] A poll that month by the Pew Research Center stated that 65% of Americans initially supported requiring everyone to have health insurance. The support decreased to just 34% when pollsters told the respondents that this would involve charging penalties to those who would prefer not to buy insurance.^[7] The Washington Post stated in June 2009 that support for an individual mandate ranges from 44% to 70%, depending on the specific provisions mentioned.^[39]

A Pew Research Center report published in October 8 stated that 66% of Americans favor requiring individuals to buy insurance provided that the government gives financial assistance to those unable to afford it.^[40]

[edit] State systems

This section requires expansion.

The Boston Globe reported that, since Massachusetts mandated the uninsured to purchase insurance, emergency visits and costs have increased;^[41] insurance premiums have increased faster than the rest of the United States, and are now the highest in the country.^[42] Writing in the New York Times opinion blog "Room for Debate" the single-payer health care advocate Marcia Angell, former editor-in-chief of the New England Journal of Medicine, said that a coverage mandate would not be necessary within a single-payer system and that even within the context of current system she was "troubled by the notion of an individual mandate."^[43] She described the Massachusetts mandates as "a windfall for the insurance industry" and wrote, "Premiums are rising much faster than income, benefit packages are getting skimpier, and deductibles and co-payments are going up."^[43]

Other states do provide community rating and guaranteed issue, without mandates and with lower premiums than Massachusetts.^[44] For example, New York, which borders Massachusetts, requires pure community rating and individual guaranteed issue.

[edit] Employer mandates

An employer mandate sets up a requirement that firms either buy health insurance for their employees or face a penalty.

[edit] Asian health care systems

This section requires expansion.

[edit] South American health care systems

This section requires expansion.

[edit] United States health care system

[edit] United States national debates and arguments

This section requires expansion.

Business groups such as the U.S. Chamber of Commerce, the National Association of Health Underwriters and the National Retail Federation oppose the idea, saying it could lead companies to lower wages, cut jobs, or possibly go out of business. Most Republicans also criticize the idea for the same reasons.^[45]

Supporters such as Wal-Mart Stores, Inc. argue that the mandate would expand coverage and thus lower overall health care costs, which benefits firms. White House Chief of Staff Rahm Emanuel has stated that "[c]ost control and employer mandate are heads and tails of the same coin."^[45]

[edit] Public opinion in the United States

A July 2009 survey by Quinnipiac University stated that Americans widely reject the idea of enacting fees on businesses in order to pay for their employee's insurance plans, with 73% opposed with 24% in support. A majority of Democrats disagreed as well, but by less than either Republicans or independents.^[38] An October poll by the Pew Research Center found that about 59% of Americans support requiring employers that do not provide health insurance to pay into a special government health care fund.^[40]

[edit] See also

[edit] References

[edit] External links

• Individual Mandates for Health Insurance - Slippery Slope to National Health Care
• The argument for an employer mandate