Problems with Individual Mandates in Massachusetts

Two of the four plans under consideration by the 208 Commission include individual insurance mandates - i.e., individuals are forced to purchase health insurance, with the terms of the insurance set by the government. As this June 11, 2007 article from the New York Times observes, Massachusetts is having a hard time enforcing such mandates in their attempt at "universal coverage". Here are a few excerpts:

"Mandatory Coverage Is Easier Said Than Done"

...Requiring people who can afford health insurance to buy it -- the same way that car owners must buy auto insurance -- appeals to those who believe that mandatory coverage is fairer than asking everyone else, directly or indirectly, to pick up the health care costs of those who choose not to buy it.

...But the state [Massachusetts] is discovering that making health insurance mandatory is easier said than done. It has spent the past year dealing with questions about how much basic coverage people need, and how much they can be expected to pay.

A mandate is critical, however, to helping the state achieve near-universal coverage,...

...Nevertheless, forcing people to buy coverage can be difficult, especially when some people do not think they need it.

Many residents dislike the mandates because the state is simultaneously forcing insurers to provide a generous benefits package, which may be more extravagant (and therefore more expensive) than they would otherwise voluntarily purchase with their own money:

"If you make everyone buy a Cadillac, you're going to have more people who can't afford it," said Devon M. Herrick, a senior fellow at the National Center for Policy Analysis, a nonprofit research group in Dallas that favors market-oriented solutions.

Mandates are wrong because they entail government forcing people to spend their own money in the way that the bureaucrats prefer, rather than allowing individuals to use their rational judgment to decide what's in their own best interest. It's no surprise that individuals chafe under mandates.

In contrast, a system of Health Savings Accounts (HSA's) coupled with high-deductible, low-cost catastrophic insurance (such as featured in this recent Business Week article) takes the exact opposite approach. Such systems allow citizens to decide for themselves how best to spend their health care dollars. They respect individual rights and encourage individual responsibility, because they allow people to exercise their independent judgment to decide what's best for themselves. As one would expect, such free-market based systems result in higher quality patient care for lower prices.