DO WE NEED INDIVIDUAL HEALTH INSURANCE MANDATES?
April 21, 2008
An individual health insurance mandate requires everyone to purchase the kind of health insurance the government stipulates, regardless of cost and before he or she meets other household needs. It also ignores the fact that having health insurance does not guarantee medical care -- which is a particular problem in government programs with reimbursement rates so low that physicians and hospitals choose not to participate, says the National Center for Policy Analysis (NCPA).
Although individual insurance needs vary with such factors as age, location, health status, wealth, income, medical care preferences and the propensity to travel, most proposals do not take these differences into account.
According to the NCPA:
- The imposition of an individual mandate with minimum coverage requirements will likely mean that thousands of people who currently have health insurance will find that their policies do not meet the minimum standards because their deductibles are "too high" for the officials defining the minimum standards, or because their policies lack certain benefits.
- These decisions will be made by a regulatory body that has no direct knowledge of the incomes, assets, health status or values of the individual policyholders.
- This is what is happening under the failing Massachusetts health reform plan.
From an individual's point of view, a mandate is a tax, says the NCPA:
- By forcing people to buy a product they may not want at a price they cannot control, the individual mandate functions as a potentially unlimited tax for health insurance.
- People who currently get health care but have no insurance will be required to purchase insurance, thus increasing their costs.
- People who are allegedly unable to purchase insurance because it is unaffordable will have to be subsidized to a larger extent than they are at present.
- Funding those subsidies will require direct tax increases that will raise costs for all citizens, whether those increases are in the form of taxes on insurance premiums, provider taxes, sales taxes or increases in the income tax.
Source: Linda Gorman and R. Allan Jensen, "State Health Care Reform: Key Questions and Answers," National Center for Policy Analysis, Policy Report No. 311, April 2008.
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