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Young People Must Be Required to Buy Insurance

Image via NBC

States require that people have car insurance. There’s nothing “un-American” about mandating the purchase of health insurance.

Americans bristle at “mandates” of any sort. Limited government and the freedom to choose what is right for one’s own family are essential American values. However, there comes a time when it is responsible and sensible to exchange a small amount of choice for the collective good. In a country as advanced and productive as the U.S., every American deserves a basic level of affordable health care.

The Patient Protection and Affordable Care Act, passed under Barack Obama, made steps in the right direction by instituting an individual mandate for a minimum level of health insurance coverage. The American Health Care Act, which was passed by the House of Representatives, and the Better Care Reconciliation Act, which has yet to face a vote in the Senate, threaten that progress by repealing the individual mandate.

For a health insurance market to function, young and healthy customers must be nudged into joining the insured pool. When healthy people opt not to buy insurance, only those with poorer health, and therefore higher costs, remain insured. Insurance companies must charge higher premiums to cover the fact that they are insuring so many sick people. Therefore, insurance prices spiral upwards, further encouraging the young and healthy to refrain from buying insurance.

Mandated insurance is meant to prevent that “death spiral” of increasing costs and to keep healthy people in the pool. It ensures that one of the most popular facets of the Affordable Care Act–guaranteed coverage for individuals with pre-existing conditions–is tenable because with a healthier insured pool, companies can take on patients that are costly to insure.

In practice, the individual mandate is unquestionably a tax on younger and healthier people, but it is a tax that is completely justified and legitimate.

Conservatives tend to oppose the individual mandate and claim that it is an unconstitutional overreach of government power. However, states require residents purchase auto insurance before registering a car, and mortgage lenders require proof of homeowner’s insurance before approving a mortgage. Those who criticize the individual mandate, and policymakers who are currently building a health care plan without it, must realize that without a secure insured and healthy population, many patients with pre-existing conditions will be excluded and the sickest Americans may be priced out of care.

There is no question that the individual mandate remains one of the most unpopular aspects of the Affordable Care Act. But the best way to improve the healthcare system is not to give Americans the freedom to go dangerously uninsured but rather to offer healthcare they are happy to buy.

Therefore, this particular issue is an excellent opportunity for Democrats and Republicans to work together to make the individual mandate more appealing so as to encourage young and healthy people to remain in the market without forcing them to buy an insurance plan that they dislike.

The alternative to the scrapped individual mandate that congressional Republicans have offered, a “continuous coverage” penalty, is unlikely to successfully prod healthy people into the market. It will not prove any more appealing than the individual mandate. In the Senate draft, individuals who are uninsured for 63 consecutive days  are locked out of the system for six months. In the House draft, the uninsured would be subject to a 30 percent premium increase for a year.

While the Affordable Care Act assesses a fine for each year a person remains uninsured, the Republican plans would punish patients who decide to buy insurance after not being in the market. That could create a perverse incentive for patients to delay purchasing insurance; if you’re parked illegally and know you’re going to get a ticket at some point, you might as well stay a while.

No person in the United States should fear financial ruin in the event of an unexpected cancer diagnosis, car accident, or pregnancy. However, increases in healthcare costs that will accompany an unhealthy insurance pool could precipitate just that.

Republicans got seven years of political mileage out of campaigning against the Affordable Care Act. Now that they have control of both Houses of Congress and the White House, it’s time for them to govern—and to govern sensibly. Judging from the rock-bottom approval ratings of their health care bills, Republican lawmakers are poised to discover that constituents, who wanted choice did not wish for a system in which 24 million more of them “choose” to be uninsured.

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