NCPA - National Center for Policy Analysis


September 6, 2006

Should we require individuals to buy health insurance?  Sounds like a good solution to the problem of growing numbers of people who are uninsured:  If people won't buy health insurance voluntarily, pass a law mandating that they buy it anyway.  Problem solved.

Well, not quite, says Greg Scandlen, president of Consumers for Health Care Choices.   How do we know mandatory coverage will work?  How do we know it will succeed in getting people who do not currently have health insurance to buy it?  Policymakers can get an idea of how well mandatory health insurance would work to reduce the number of uninsured by looking at another type of mandated coverage: auto finance.

  • All but three states mandate automobile insurance, but 14.6 percent of America's drivers remained uninsured in 2004, according to the Insurance Research Council.
  • No state mandates health insurance, but 17.2 percent of the population lacked health coverage in 2004, according to the Employee Benefit Research Institute.
  • In 17 states, the uninsured rate for auto is higher than for health.

This is a remarkable finding considering that driving is a voluntary activity and enforcement is relatively easy -- making people show proof of insurance when they register their cars, says Scandlen.  Further, auto coverage is relatively inexpensive, especially since the only part of the coverage mandated in most states is the damage you might do to other people and their property.  You are not required to insure for the damage you do to yourself or your own car.

There are no easy solutions to America's health insurance problem.  The current notion that a state legislature can solve the problem through mandatory coverage is naïve at best and a distraction from the hard work of finding real solutions, says Scandlen. 

Source: Greg Scandlen, "Will Mandatory Health Insurance Work?" National Center for Policy Analysis, Brief Analysis No. 569, September 6, 2006.

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