Should Americans be forced to buy health insurance?

by Joyce Frieden

When it comes to the healthcare reform law, no provision is more controversial than the individual mandate – the part that requires every citizen to purchase health insurance or pay a penalty.

More than 20 state attorneys general are suing the federal government over the health reform law, in large part because of this provision. Several states have already passed laws declaring an individual mandate unenforceable in their state, and in August, Missouri will be putting the mandate to the voters to let them decide.

What is intriguing about this is the idea behind the lawsuits: that people should be free not to buy health insurance. Certainly there is an argument to be made that, as citizens of a free country, Americans should not be coerced into buying a particular product from a private company. What’s next, the proponents of these laws argue, making people buy soda? Or something more expensive, like life insurance?

Some people who are in favor of the mandate argue that it’s similar to laws requiring those who drive a car to have automobile insurance. But that’s not really a fair comparison, because there is an easy way out of making that insurance purchase: don’t buy a car. And while not having a car could make life extremely difficult depending on your geographic location, unlike health insurance, it’s not a life-or-death issue.

On the other hand, arguing that health insurance shouldn’t be mandatory means that some people will be uninsured, and might not have health insurance when they get seriously ill, which is a life-or-death issue. Do mandate opponents want everyone to have the “right” to be uninsured in that situation?

The other problem is that, as everyone knows, uninsured people still get sick, and they still end up getting healthcare – it’s just that providers don’t get paid for it. Instead, hospitals and doctors write off those costs, and to make up for that lost revenue, they charge their paying customers – the insured patients or people who self-pay — a little more to make up for it.

Or hospitals get extra money from the federal government, in the form of something called “DSH” (disproportionate share hospital) payments, to make up for that lost income. That money, of course, comes from taxpayers, most of whom are insured. So either way, the insured end up paying the bills of the uninsured.

If people who chose not to be insured even though they could afford it agreed not to seek healthcare once they became seriously ill, that would solve the problem of having the insured pay for the uninsured – but it obviously wouldn’t be a very humanitarian solution. (The low-income uninsured are an entirely different issue.)

Perhaps there is a way to insure almost everyone without making it mandatory. Some mandate opponents favor enrolling most people in tax-favored health savings accounts combined with high-deductible insurance policies.

Under those arrangements, account holders use the money in the savings account – usually anywhere from $3,000 to $5,000 or more, some or all of which may be contributed by their employer — to pay for healthcare initially, and the high-deductible account kicks in after the savings account is exhausted.

Proponents say these plans are less expensive than standard health insurance plans, so more people will be able to become insured. But there are problems with them: they work better for relatively healthy people who aren’t likely to spend much of the money in the account, some people can’t afford to make the contributions, and those with low incomes might be tempted to skip needed treatments or medications if they have to pay for them out of their own pocket.

As the Obama administration begins to implement the healthcare reform bill, watch for the debate over the individual mandate to grow more intense, and the search for solutions to the uninsured problem to continue.

Joyce Frieden is a MedPage Today News Editor and blogs at In Other Words, the MedPage Today staff blog.

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