Saturday, June 30, 2007

Should Insurance Be Mandatory?

With the debate over the nation's health-care system heating up -- and getting stoked by Michael Moore's "Sicko" -- a contentious question has emerged: Should everyone be required to have health insurance, as drivers are compelled to have auto insurance?

[Mitt Romney]

Massachusetts's answer: yes. Under the Bay State's sweeping health-overhaul law, pressed by Republican former Gov. Mitt Romney, most adults are required to have health insurance by tomorrow. While Massachusetts was the first state to pose an "individual mandate," it's unlikely to be the last.

In California, Gov. Arnold Schwarzenegger is pushing an individual-insurance requirement as part of a health-care overhaul; Democratic leaders are balking. Democratic Gov. Edward Rendell has proposed it in his "Prescription for Pennsylvania," and several other states are considering it.

"It's very much on the table," says Alan Weil, executive director of the National Academy for State Health Policy, a nonprofit based in Portland, Maine. "Politically, it has become a mainstream concept." Still, he says, it gets a "funny mix" of reactions, creating splits on left and right.

Democratic presidential contender John Edwards proposed it in his health plan; Sen. Hillary Clinton is expected to, as well. Illinois Sen. Barack Obama's proposal doesn't include it. Republican presidential contender Rudolph Giuliani opposes it. The conservative Heritage Foundation, a Washington think tank, supports it, while across town the libertarian Cato Institute denounces it.

Proponents say an individual mandate is essential to reaching the goal of universal, or near-universal, coverage because without it many young and healthy people wouldn't bother to buy insurance. The result: an insurance pool dominated by older, sicker people, with steadily rising -- and ultimately unaffordable -- premiums.

"If you really believe in universal coverage, you have to have an individual mandate," says Jonathan Gruber, a professor at the Massachusetts Institute of Technology who has played a role in the Massachusetts and California overhauls.

But some liberals and labor groups say the rule unfairly dumps financial responsibility for insurance on individuals, when it should rest either with the government, through a single-payer system, or with employers. On the other end of the spectrum, Michael Tanner, the Cato Institute's director of health and welfare studies, decries the mandate as "an unprecedented invasion of individual liberty." Unlike the auto-insurance requirement, which can be avoided by not driving, the health mandate can't be ducked, he says.

Massachusetts took steps to help uninsured residents comply with the new requirement. It expanded Medicaid, the state-federal program for the poor, to cover more children, and created a complex system of subsidies for other lower-income people. A new state agency, called the Commonwealth Health Insurance Connector, is helping the uninsured find affordable coverage; even so, it expects that about 60,000 people, or 20% of the state's uninsured, ultimately will be exempted from the requirement because they won't be able to afford insurance. Without such steps to soften the impact of the requirement, says Mr. Weil, "a mandate is either cruel or meaningless."

So far, despite the looming deadline, about a third of Massachusetts's uninsured residents have signed up for coverage either through Medicaid or the Connector, according to state officials. The uninsured have some wiggle room -- they need only prove they had insurance by the end of the year, not July 1. Those who don't comply will risk losing their personal tax exemption, about $219. In later years, the penalty will be increased, and will top more than $1,000 for some people.

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