Do Individual Mandates Matter?

Publication Date:

Publisher:

Author(s): L.J. Blumberg; J. Holahan

Research Area: Health

Type: Report

Abstract:

Many reform proposals being discussed at the state level and in the presidential campaigns include mandates that individuals must obtain health insurance. The Massachusetts reforms, for example, include an individual mandate for adults, conditional on there being an available policy that meets the affordability standards set by the state. Other reform proposals would make participation in insurance programs voluntary, but create new ways to encourage people to obtain insurance.
[BREAK]
Should individuals be required to obtain health insurance? How necessary are individual mandates for ensuring that all Americans have health coverage?
[BREAK]
In this policy brief from the Urban Institute, health economists Linda Blumberg and John Holahan contend that it is not possible to achieve universal coverage without an individual mandate. Their argument rests on three points:
[BREAK]
* Many people will choose not to obtain coverage under a purely voluntary system.
* A voluntary system would appeal disproportionately to people who have more health problems and higher medical costs, leading to higher premiums and instability in health insurance pools.
* A system that leaves large numbers of people uninsured would not enable the government to redirect money it spends on their care toward other health reforms.
[BREAK]
The authors conclude that a combination of increased subsidies, more affordable coverage options and new mechanisms to encourage voluntary insurance enrollment would still leave more than 15 million people without coverage.