One of the centerpieces of the healthcare bills currently being debated in Congress is an individual mandate, which would require everyone to buy insurance or face a penalty. A similar mandate would apply to businesses, requiring them to either offer insurance or pay a penalty.
Varying levels of subsidies and assistance are being proposed, including hardship exemptions, to help lower and middle income Americans and small businesses offset a significant new expense.
There is an even more basic argument as to whether anyone should be forced to buy health insurance at all. From a libertarian standpoint, such a mandate is an infringement of the first order.
Proponents have likened the mandate to car insurance, which everyone is required to buy if they own a car. But this is a specious argument: people are required to buy car insurance because of the harm they might inflict on others. The liability insurance that everyone must carry makes sure that drivers can’t impose costs on someone else without being able to compensate them.
Libertarians claim that no such externality exists in healthcare. If a person chooses not to buy health insurance, the argument goes, the risk will fall only on that person; ergo, it’s each individual’s right to decide whether health insurance is worth it.
But this argument too is specious.
For one, we as a society are not willing to let people go without care when they get sick. People are not turned away at emergency rooms if they don’t have coverage, even if they could have afforded it. It’s inhumane to let people suffer and possibly die because they miscalculate whether they’re going to stay healthy (like the law student in this article, who thought he could go without insurance in his early 20s but instead got a rare form of cancer). In addition, when a mother or father gets sick and does not have insurance, their children can become innocent victims. Last but not least, the costs of treating the uninsured are in fact picked up, in the form of higher premiums, by all those who already have insurance.
The bottom line is that most people who don’t have insurance are either too poor to afford it or are gambling in a foolish way. Since most Americans find it unconscionable to refuse treatment to sick people, the most obvious and efficient solution is to make sure everyone has at least basic health insurance.
A sizeable percentage of the people currently without insurance are young and healthy, and their premiums will be relatively low. Their numbers are large enough, however, that the income from their policies can help subsidize care for everyone else. Remember: It is only because insurers are poised to gain up to 45 million new customers that they’ve agreed not to turn people away due to preexisting conditions, and to accept caps on individuals’ total out-of-pocket expenses.
If we lived in a world in which personal responsibility was taken to the extreme, and people were left to die if they got sick or in accidents and either didn’t have insurance or couldn’t afford treatment, then a mandate wouldn’t be necessary. Fortunately we don’t live in such a world, and a mandate is a necessary component of good public policy.
All the same, there is an urgent need for more personal responsibility in healthcare, and for incentives that match behaviors to outcomes. I’ll address these issues in a future piece. First, by mandate, let’s make sure that everyone has at least a basic level of insurance.
Jason Scorse