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Individual Health Insurance Mandates – Pros & Cons

Several universal insurance coverage models incorporate an individual mandate which requires every person to obtain health insurance coverage.  A main argument for individual mandates centers around the elimination of free-riders who choose to forego private insurance and instead choose to obtain care during an emergency situation.  Eliminating free-riders might make the system more fair although not necessarily less costly.  Mandating universal coverage addresses the administrative costs diverted to marketing and underwriting; mandates promote coverage through the symbolic priority granted by the government’s commitment to universal coverage.

However, inducing the uninsured to take up coverage will require substantial subsidies in order to ensure the financially disadvantage can afford coverage. Such subsidies might then influence those who are privately insured to cross over to government programs (a concept known as “crowd out”).

An individual mandate can also be considered similar to a tax, which penalizes the uninsured person who cannot afford to buy private coverage and forces them to pay for a service they do not desire. Mandates require enforcement, which would require a system for identification and penalization that, if not implemented efficiently, might increase bureaucracy. Recall that most states mandate car insurance; think about how many uninsured drivers are on the road.

Commentary:

Dr. Glied outlines significant pros and cons for mandated insurance coverage.  Though she touches upon the importance of symbolism surrounding a mandate, she does not address President Obama’s main argument against mandates – that mandates are not necessary if insurance coverage was made more available and affordable.  The larger issue should be the actual cost of insurance. Government’s symbolic gesture should instead be the commitment that health care is not a commodity to be negotiated.  Why force coverage on those who cannot afford it when instead government can change the rules of the game by regulating those who profit from the sale and purchase of health insurance coverage?

NEJM 2008; 358 (15): 1540-1542.

by

Kameron L. Matthews, MD, Esq. 

About Kameron Matthews, MD, JD

Lead Analyst – Access to Care Dr. Matthews is the Medical Director/Chief Medical Officer of Mile Square Health Center at University of Illinois at Chicago Hospital & Health Sciences System. She previously served as Site Medical Director of the Division Street site of Erie Family Health Center, a federally qualified health center in Chicago that treats an underserved, Latino patient population. Prior to that position, she worked for two years as a staff Attending Physician at Cermak Health Services of Cook County, the entity that provides healthcare to the 10,000 detainees of the Cook County Department of Corrections. At Cermak, she served as the facilitating member of the Interagency Gender Identity Committee, responsible for the safety and security of transgender inmates. With a strong dedication to primary care services for the underserved, she is honored to have been awarded loan repayment through the National Health Service Corps. Contact: Facebook | Twitter | More Posts

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