More on health insurance mandates

Megan McArdle writes:

Tyler wonders what will be done
with people who are required to by health insurance, but don’t. The
answer, I think, is "they’ll get treated". The object is not to play
chicken with people; we can’t make a credible committment not to treat
people without insurance (and thank god for that.) The object, as I see
it, is to force the people who care about things like legality to get
insurance rather than rolling the dice. The people who don’t care about
such things will continue costing us some fraction of the small amount
that caring for the uninsured currently costs us now. It may only be a
slight improvement, but it’s still an improvement.

"Improvement over what?" is my query.  I prefer taking the needy (some would say more than the needy, not I) and having the government directly provide health insurance for them.  I imagine a better and no-real-role-for-the-states version of Medicaid, at the expense of Medicare (lots of old people are wealthy) if it fiscally must be.  If it’s worth forcing X to buy health insurance and then subsidizing X, it is worth giving X health insurance directly.

Avoiding the mandate keeps the private insurance market relatively "clean," as it were.  Mandating private insurance means that the government has to regulate the content of that coverage and that private insurance will likely become more cumbersome and more contested and more expensive for everyone.  It means we will never have true insurance deregulation; private plans should be free to compete, innovate, offer catastrophic-only plans, sniffles-only plans, and so on.

The benefits of the health insurance mandate are otherwise small.  Many people care about "being legal" (the parents of uninsured 20 somethings?) but those people are probably the least likely to need the insurance.  And I am leery of having a law that we know in advance we are not going to enforce.  (It’s not as if you post a 25 mph speed limit knowing you will only pull over the young people who look like criminals; in this case we’re simply deciding on no enforcement or using some dubious bureaucratic tactic of differentiation across citizens.) 

And aren’t mandates more generally a dangerous and over-used practice?

So I say no, let’s not do it.  It might be better than doing nothing, but doing nothing is not the only alternative before us.  Doing nothing is not even the likely alternative at this point.  The mandates limit chances for better long-run reforms, though Matt and Brad will tell you this is single-payer, I will look toward insurance market deregulation.  Only one of us has to be right.

Addendum: Here is Ezra Klein on same.


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