Health insurance mandate
Encyclopedia
A health insurance mandate is either an employer or individual mandate
to obtain private health insurance
, instead of (or in addition to) a National Health Service
or National Health Insurance
.
insurance legislation signed in 2010 includes both employer and individual mandates to take effect in 2014, but it is controversial and is being widely challenged in federal courts. As of 2011, more than half the states and several organizations and individuals are suing to challenge the mandate in federal courts, and the decisions so far have divided almost evenly; the issue is expected to be decided by the United States Supreme Court. After a federal district court judge invalidated the entire legislation based on the individual mandate provision being unconstitutional, a divided three-judge panel of the U.S. 11th Circuit Court of Appeals based in Atlanta affirmed in part: the panel agreed the individual mandate was unconstitutional, but decided that it could be severed, allowing the rest of the statute to remain; as of October 2011, both sides have asked the Supreme Court to hear the case.
Insurance lobbyists
(AHIP) in the United States say the mandate is necessary to support guaranteed issue
and community rating
, which limit underwriting
by insurers; insurers say the mandate is intended to prevent adverse selection
by ensuring healthy individuals purchase insurance and thus broaden the risk pool
. Studies of empirical evidence suggest that the threat of adverse selection is exaggerated, and that risk aversion
and propitious selection may balance it. For example, several US states have guaranteed issue and limits on rating, but only Massachusetts has an individual mandate; similarly, although Japan has a nominal mandate, around 10% of individuals do not comply, and there is no penalty (they simply remain uninsured - see below). Without mandates, for-profit insurers have necessarily relied on risk aversion to charge premiums over expected risks, but have been constrained by what customers are willing to pay; mandates eliminate that constraint, allowing insurers to charge more. Governments that impose a mandate must subsidize those who cannot afford it, thus shifting the cost onto taxpayers.
In 2010, the Congressional Budget Office
estimated that more than 20 million people would remain uninsured despite the mandates and subsidies enacted. A 2004 editorial in USA Today
asserted that United States Department of Health and Human Services
(HHS) data show the uninsured are unfairly billed for services at rates far higher—on average 305% at urban hospitals in California—than are the insured; USA Today concluded that "millions of [uninsured patients] are forced to subsidize insured patients." Citing data from the Urban Institute
and the experience of Massachusetts
(see below), the Cato Institute
argues that without the uninsured, "The insured would pay more, not less." The Pacific Research Institute
argues that the uninsured subsidize the insured, do not drive up the cost of health care, and use fewer services than the insured.
The Los Angeles Times
reported in 2009 that mandates without cost controls "add up to higher costs for taxpayers and consumers." The Washington Post reported that even with mandates insurers would likely continue discrimination to "chase away the chronically ill," quoting Karen Pollitz, research professor at the Georgetown University
Health Policy Institute: "The race is to the bottom." The Wall Street Journal said it would render constitutional limits on federal power "a dead letter" and asked, "If the insurance mandate stands, then why can't Congress insist that Americans buy GM cars, or that obese Americans eat their vegetables or pay a fat tax penalty?"
National Nurses United
, the nation's largest registered nurses organization and a supporter of Medicare
-for-all, ranked the individual mandate first in a list of 10 problems explaining their opposition to the bills passed by Congress in 2009. The California Nurses Association, which supports single-payer healthcare, added that due to "insurance company pirates and their predatory pricing practices...subsidies and tweaking will amount to little more than an umbrella in a hurricane." Physicians for a National Health Program
, which also supports single-payer healthcare, wrote that "mandate-based health reforms don't work."
The insurance mandate has faced opposition across the political spectrum, from left-leaning
groups such as the Green Party
and other advocates of single-payer healthcare to right-leaning
groups such as the Heritage Foundation
, FreedomWorks
, and the Cato Institute
as well as some members of the U.S. Senate and House of Representatives. In the Senate Finance Committee, Republican Jim Bunning
of Kentucky
has called a mandate 'un-American
' and argued that it "may even be unconstitutional".
However, the idea has traditionally gathered support from insurance companies and some politicians within the Republican Party (Charles Grassley, Mitt Romney
, and the late John Chafee
are examples), and became part of the defeated Clinton health care plan of 1993 and Hillary Clinton's plan in 2008. Some sources trace the idea to the Heritage Foundation
around 1990, but the Heritage Foundation has since concluded that the mandate is unconstitutional. In 2008, mandate supporter Larry Levitt, Vice President of the Kaiser Family Foundation
(founded by the founder of the Kaiser Permanente
HMO), stated in a Kaiser Network "interactive web show" that the mandate has been at the heart of health care reform proposals in the United States
. In the same Kaiser network show, Dr. Len Nichols, Director of the Health Policy Program at the New America Foundation
, called an individual mandate an "absolutely necessary" pre-condition to universal health care
: he stated that, without a mandate, only a maximum of about half of uninsured Americans would likely obtain coverage under any non-compulsory reform. A 2008 AHIP/Kaiser forum cited Dutch and Swiss mandates (see below); AHIP's published report does not mention penalties but says Switzerland "enforces the rules in many ways..." In October 2009, Kaiser Health News reported that "the mandate has become a target for both Democrats and Republicans" and stated, "The insurance industry is clearly worried about the mandate being defanged."
Opponents such as Michael Cannon, Director of Health Policy Studies at the Cato Institute
, make a philosophical argument that people should have the right to live without government social interference as a matter of individual liberty. He has stated that federal, state, and local governments are not willing or able to raise the necessary funds to effectively subsidize people who cannot currently afford insurance. He has also stated that the costs of increasing coverage are far higher than other reforms, such as reducing the amount of errors and accidents in treatment, which would accomplish as much or more benefit to society.
Writing in the Huffington Post, Michael Moore
criticized mandates as part of a "massive government bailout for the insurance industry." On FireDogLake
, Jane Hamsher
called it "lemon socialism
." Consumer Watchdog (CWD)
writes, "Requiring people to buy unaffordable and unreliable insurance policies is not the solution to the health care crisis;" CWD's John Simpson added, "Mandating that everyone must buy insurance from private companies simply guarantees huge profits for the industry." Interviewed on Democracy Now!
, Ralph Nader
said people are "being forced to buy junk insurance policies" and called the bill's imminent enactment "a disaster."
On CNN
, Lou Dobbs Tonight
analyzed the financial costs of an individual mandate and quoted The Politico
's Nia-Malika Henderson: "the individual mandate is really going to rub a lot of people the wrong way." Summarizing published sources of the debate from 2007 through 2009, James Joyner
concluded: "Forcing Americans to buy health insurance regardless of whether they want it or can afford it is extremely controversial, with not only Republicans but most of the Democratic contenders for the presidency in 2008 opposing it."
There is also disagreement as to whether federal mandates can be constitutional. In 2010, a majority of the 50 states filed litigation contending the individual mandate is unconstitutional, and newly elected Republican governors campaigned promising to add their states to the list in 2011; federal district courts have split on the constitutionality issue, which is expected ultimately to reach the Supreme Court; also, state legislative actions may at least cause delay. The Militia Acts of 1792, based on the Constitution's militia clause (in addition to its affirmative authorization to raise an army and a navy), would have required every "free able-bodied white male citizen" between the ages of 18 and 45, with a few occupational exceptions, to "provide himself" a weapon and ammunition; however, it was never enforced so its constitutionality was never litigated. In 1994, the Congressional Budget Office
issued a report describing an individual mandate as "an unprecedented form of federal action." The agency also wrote, "The government has never required people to buy any good or service as a condition of lawful residence in the United States."
In a September 2010 working paper, a forthcoming article in the NYU Journal of Law and Liberty, and a lecture given at NYU, Randy Barnett
of Georgetown University Law Center
argues that the mandate is unconstitutional under the doctrine of the Commerce and Necessary and Proper Clauses, and that enforcing it is equivalent to "commandeering the people." Penalizing inaction, he argues, is only defensible when a fundamental duty of a person has been established. He also notes that Congress fails to enforce the mandate under its taxing power because the penalty is not revenue-generating according to the Act itself.
Public opinion polls from 2009 through 2011 continue to find that most Americans reject penalizing people for not buying health insurance. In 2010, voters in at least three states enacted ballot measures to block the individual mandate, "laying the foundation for future legal challenges... Oklahoma approved an opt-out ballot initiative by a 2-to-1 margin. Proposition 106 in Arizona gained 55 percent of the vote while Colorado's Amendment 63 was trailing early Wednesday morning. Missouri voters approved a similar measure, Proposition C, with 71 percent support on a primary ballot in August." In November 2011, the issue will appear on the ballot in Ohio, where a Quinnipiac Poll of registered voters found that "when asked if they agree with a mandate that they obtain coverage or face fines, opposition jumped to 67 percent, with just 29 percent backing the mandate."
opinion blog
"Room for Debate," single-payer health care
advocate Marcia Angell
(a former editor-in-chief of the New England Journal of Medicine
), said that a coverage mandate would not be necessary within a single-payer system and that even within the context of the current system she was "troubled by the notion of an individual mandate." She described the Massachusetts mandates as "a windfall for the insurance industry" and wrote, "Premiums are rising much faster than income, benefit packages are getting skimpier, and deductibles and co-payments are going up."
Other states do provide community rating
and guaranteed issue, without mandates and with lower premiums than Massachusetts. For example, New York
, which borders Massachusetts
, requires pure community rating and individual guaranteed issue.
has a universal health care system that mandates all residents have health insurance, either at work or through a local community-based insurer, but does not impose penalties on individuals for not having insurance. The Japanese health ministry
"tightly controls the price of health care down to the smallest detail. Every two years, the doctors and the health ministry negotiate a fixed price for every procedure and every drug. That helps keep premiums to around $280 a month for the average Japanese family." Insurance premiums are set by the government, with guaranteed issue and community rating. Insurers are not allowed to deny claims or coverage, or to make profits (net revenue is carried over to the next year, and if the carryover is large, the premium goes down). Around 10% evade the compulsory insurance premium; municipal governments do not issue them insurance cards, which providers require. Voluntary private insurance is available through several sources including employers and unions to cover expenditures not covered by statutory insurance, but this accounts for only about 2% of health care spending. Generally, doctors cannot deny care to patients in the low-priced universal system because if they did, they would "go out of business." Total spending is around half the American level, and taxpayers subsidize the poor.
's national health insurance
program is known as Medicare, and is financed by general taxation including a Medicare levy on earnings; use of Medicare is not compulsory and the tax code encourages people to buy private insurance. Individuals with high annual incomes (A$70,000 in the 2008 federal budget) who do not have specified levels of private hospital coverage are subject to an additional 1% Medicare Levy Surcharge. People of average incomes and below may be eligible for subsidies to buy private insurance, but face no penalty for not buying it. Private insurers must comply with guaranteed issue
and community rating
requirements, but may limit coverage of pre-existing ailments for up to one year to discourage adverse selection
.
has a health insurance mandate and allows for-profit companies to compete for minimum coverage insurance plans, though there are also mutual insurers so use of a commercial for-profit insurer is not compulsory. The government regulates the insurers and operates a risk equalization
mechanism to subsidize insurers that insure relatively more expensive customers. Several features hold down the level of premiums which facilitate public compliance with the mandate. The cost of health care in the Netherlands is higher than the European average but is less than in the United States. Half of the cost of insurance for adults is paid for by an income-related tax with which goes towards a subsidy of private insurance via the risk reinsurance pool operated by the regulator. The government pays the entire cost for children. Forty percent of the population is eligible for a premium subsidy. About 1.5 percent of the legal population is estimated to be uninsured. The architects of the Dutch mandate did not envision any problem with non-compliance, the initial legislation created few effective sanctions if a person does not take out insurance or pay premiums, and the government is currently developing enforcement mechanisms.
's system approximates to that of the Netherlands with regulated private insurance companies competing to provide the minimum necessary coverage to meet its mandate. Premiums are not linked to incomes, but the government provides subsidies to lower-class individuals to help them pay for their plans. About 40% of households received some kind of subsidy in 2004. Individuals are free to spend as much as they want for their plans and buy additional health services if desired. The system has virtual universal coverage, with about 99% of people having insurance. The laws behind the system were created in 1996. A recent issue in the country is their rising health care costs, which are higher than European averages. However, those rising costs are still a little less than the increases in the United States.
insurance legislation signed in 2010 includes both employer and individual mandates to take effect in 2014, but it is controversial and is being widely challenged in federal courts. As of 2011, more than half the states and several organizations and individuals are suing to challenge the mandate in federal courts, and the decisions so far have divided almost evenly; the issue is expected to be decided by the United States Supreme Court. In August 2011, after a federal district court judge invalidated the entire legislation based on the individual mandate provision being unconstitutional, a divided three-judge panel of the U.S. 11th Circuit Court of Appeals based in Atlanta affirmed in part: the panel agreed the individual mandate was unconstitutional, but decided that it could be severed, allowing the rest of the statute to remain. The Obama Administration decided not to ask the full Appeals Court to review the decision and instead directly asked the Supreme Court to hear the case.
and Germany
, Statutory Health Insurance (SHI) mandates employers and employees pay into statutory sickness funds. In France, private health insurance (PHI) is voluntary and used to increase the reimbursement rate from the statutory sickness system. The same applies in Germany where it is also possible to opt out of SHI if you are a very high earner and into a PHI but if a person has reached the age of 55 and is in the PHI sector he or she must remain covered by PHI and cannot opt back into SHI. Persons who are unemployed can usually continue their payments through social insurance
and the very poor receive support from the government to be insured. Most workers are insured through compulsory membership of "sickness funds" that are non-profit entities established originally by trades unions and now given statutory status. In Germany and France, as is the case with most European health care finance, the personal contribution to health care financing varies according to a person's income level and not according to their health status. compliance with the mandate is high. Only 0.2% of Germans are uninsured, mainly self-employed, rich and poor, and persons who have failed to pay contributions to the statutory insurance or premiums to the private health insurance. Between 1990 and 2000 the share of French SHI income coming directly from employees via salaries fell from around 30% to just 3% and employer direct contributions also fell. The difference was made up by a rise in income from government taxation, thus widening the mandatory contribution base to the health insurance system.
External links=
Individual mandate
An individual mandate is a requirement by a government that certain individual citizens purchase or otherwise obtain a good or service.In the United States, the United States Congress has enacted two individual mandates, the first was never federally enforced, while the second is not scheduled to...
to obtain private health insurance
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
, instead of (or in addition to) a National Health Service
National Health Service
The National Health Service is the shared name of three of the four publicly funded healthcare systems in the United Kingdom. They provide a comprehensive range of health services, the vast majority of which are free at the point of use to residents of the United Kingdom...
or National Health Insurance
National health insurance
National health insurance is health insurance that insures a national population for the costs of health care and usually is instituted as a program of healthcare reform. It is enforced by law. It may be administered by the public sector, the private sector, or a combination of both...
.
United States
FederalFederal
Federal or foederal may refer to:In politics:*Federal monarchy, a federation of monarchies or a federal organised monarchy*Federal district, a subdivision in a federal state that is under the direct control of a federal government...
insurance legislation signed in 2010 includes both employer and individual mandates to take effect in 2014, but it is controversial and is being widely challenged in federal courts. As of 2011, more than half the states and several organizations and individuals are suing to challenge the mandate in federal courts, and the decisions so far have divided almost evenly; the issue is expected to be decided by the United States Supreme Court. After a federal district court judge invalidated the entire legislation based on the individual mandate provision being unconstitutional, a divided three-judge panel of the U.S. 11th Circuit Court of Appeals based in Atlanta affirmed in part: the panel agreed the individual mandate was unconstitutional, but decided that it could be severed, allowing the rest of the statute to remain; as of October 2011, both sides have asked the Supreme Court to hear the case.
Insurance lobbyists
Lobbying
Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...
(AHIP) in the United States say the mandate is necessary to support guaranteed issue
Guaranteed issue
Guaranteed issue is a term used in health insurance to describe a situation where a policy is offered to all applicants, regardless of the health status of the applicant...
and community rating
Community rating
Community rating is a concept usually associated with health insurance, which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status.Pure community rating...
, which limit underwriting
Underwriting
Underwriting refers to the process that a large financial service provider uses to assess the eligibility of a customer to receive their products . The name derives from the Lloyd's of London insurance market...
by insurers; insurers say the mandate is intended to prevent adverse selection
Adverse selection
Adverse selection, anti-selection, or negative selection is a term used in economics, insurance, statistics, and risk management. It refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information : the "bad" products or services are more likely to be...
by ensuring healthy individuals purchase insurance and thus broaden the risk pool
Risk pool
A risk pool is one of the forms of risk management mostly practiced by insurance companies. Under this system, insurance companies come together to form a pool, which can provide protection to insurance companies against catastrophic risks such as floods, earthquakes etc. The term is also used...
. Studies of empirical evidence suggest that the threat of adverse selection is exaggerated, and that risk aversion
Risk aversion
Risk aversion is a concept in psychology, economics, and finance, based on the behavior of humans while exposed to uncertainty....
and propitious selection may balance it. For example, several US states have guaranteed issue and limits on rating, but only Massachusetts has an individual mandate; similarly, although Japan has a nominal mandate, around 10% of individuals do not comply, and there is no penalty (they simply remain uninsured - see below). Without mandates, for-profit insurers have necessarily relied on risk aversion to charge premiums over expected risks, but have been constrained by what customers are willing to pay; mandates eliminate that constraint, allowing insurers to charge more. Governments that impose a mandate must subsidize those who cannot afford it, thus shifting the cost onto taxpayers.
In 2010, the Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
estimated that more than 20 million people would remain uninsured despite the mandates and subsidies enacted. A 2004 editorial in USA Today
USA Today
USA Today is a national American daily newspaper published by the Gannett Company. It was founded by Al Neuharth. The newspaper vies with The Wall Street Journal for the position of having the widest circulation of any newspaper in the United States, something it previously held since 2003...
asserted that United States Department of Health and Human Services
United States Department of Health and Human Services
The United States Department of Health and Human Services is a Cabinet department of the United States government with the goal of protecting the health of all Americans and providing essential human services. Its motto is "Improving the health, safety, and well-being of America"...
(HHS) data show the uninsured are unfairly billed for services at rates far higher—on average 305% at urban hospitals in California—than are the insured; USA Today concluded that "millions of [uninsured patients] are forced to subsidize insured patients." Citing data from the Urban Institute
Urban Institute
The Urban Institute is a Washington, D.C.-based think tank that carries out nonpartisan economic and social policy research, collects data, evaluates social programs, educates the public on key domestic issues, and provides advice and technical assistance to developing governments abroad...
and the experience of Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
(see below), the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
argues that without the uninsured, "The insured would pay more, not less." The Pacific Research Institute
Pacific Research Institute
The Pacific Research Institute , or officially the Pacific Research Institute for Public Policy, is a California-based free-market think tank founded in 1979 whose stated vision is the promotion of "the principles of individual freedom and personal responsibility"...
argues that the uninsured subsidize the insured, do not drive up the cost of health care, and use fewer services than the insured.
The Los Angeles Times
Los Angeles Times
The Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
reported in 2009 that mandates without cost controls "add up to higher costs for taxpayers and consumers." The Washington Post reported that even with mandates insurers would likely continue discrimination to "chase away the chronically ill," quoting Karen Pollitz, research professor at the Georgetown University
Georgetown University
Georgetown University is a private, Jesuit, research university whose main campus is in the Georgetown neighborhood of Washington, D.C. Founded in 1789, it is the oldest Catholic university in the United States...
Health Policy Institute: "The race is to the bottom." The Wall Street Journal said it would render constitutional limits on federal power "a dead letter" and asked, "If the insurance mandate stands, then why can't Congress insist that Americans buy GM cars, or that obese Americans eat their vegetables or pay a fat tax penalty?"
National Nurses United
National Nurses United
National Nurses United -- with more than 150,000 members from across the country—is the largest union and professional association of registered nurses in America....
, the nation's largest registered nurses organization and a supporter of Medicare
Medicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
-for-all, ranked the individual mandate first in a list of 10 problems explaining their opposition to the bills passed by Congress in 2009. The California Nurses Association, which supports single-payer healthcare, added that due to "insurance company pirates and their predatory pricing practices...subsidies and tweaking will amount to little more than an umbrella in a hurricane." Physicians for a National Health Program
Physicians for a National Health Program
Physicians for a National Health Program , is an advocacy organization of some 17,000 American physicians, medical students, and health professionals founded by Quentin Young who support a single-payer system of national health insurance....
, which also supports single-payer healthcare, wrote that "mandate-based health reforms don't work."
The insurance mandate has faced opposition across the political spectrum, from left-leaning
Left-wing politics
In politics, Left, left-wing and leftist generally refer to support for social change to create a more egalitarian society...
groups such as the Green Party
Green Party (United States)
The Green Party of the United States is a nationally recognized political party which officially formed in 1991. It is a voluntary association of state green parties. Prior to national formation, many state affiliates had already formed and were recognized by other state parties...
and other advocates of single-payer healthcare to right-leaning
Right-wing politics
In politics, Right, right-wing and rightist generally refer to support for a hierarchical society justified on the basis of an appeal to natural law or tradition. To varying degrees, the Right rejects the egalitarian objectives of left-wing politics, claiming that the imposition of equality is...
groups such as the Heritage Foundation
Heritage Foundation
The Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage's stated mission is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong...
, FreedomWorks
FreedomWorks
FreedomWorks is a conservative non-profit organization based in Washington D.C., United States. FreedomWorks trains volunteers, assists in campaigns, and encourages them to mobilize, interacting with both fellow citizens and their political representatives....
, and the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
as well as some members of the U.S. Senate and House of Representatives. In the Senate Finance Committee, Republican Jim Bunning
Jim Bunning
James Paul David "Jim" Bunning is an American former Major League Baseball pitcher and politician.During a 17-year baseball career, he pitched from 1955 to 1971, most notably with the Detroit Tigers and the Philadelphia Phillies. When he retired, he had the second-highest total of career...
of Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
has called a mandate 'un-American
Un-American
Un-American is a pejorative term of US political discourse which is applied to people or institutions in the United States seen as deviating from US norms....
' and argued that it "may even be unconstitutional".
However, the idea has traditionally gathered support from insurance companies and some politicians within the Republican Party (Charles Grassley, Mitt Romney
Mitt Romney
Willard Mitt Romney is an American businessman and politician. He was the 70th Governor of Massachusetts from 2003 to 2007 and is a candidate for the 2012 Republican Party presidential nomination.The son of George W...
, and the late John Chafee
John Chafee
John Lester Hubbard Chafee was an American politician. He served as an officer in the United States Marine Corps, as the 66th Governor of Rhode Island, as the Secretary of the Navy, and as a United States Senator.-Early life and family:...
are examples), and became part of the defeated Clinton health care plan of 1993 and Hillary Clinton's plan in 2008. Some sources trace the idea to the Heritage Foundation
Heritage Foundation
The Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage's stated mission is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong...
around 1990, but the Heritage Foundation has since concluded that the mandate is unconstitutional. In 2008, mandate supporter Larry Levitt, Vice President of the Kaiser Family Foundation
Kaiser Family Foundation
The Henry J. Kaiser Family Foundation , or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. It focuses on the major health care issues facing the nation, as well as the U.S. role in global health policy...
(founded by the founder of the Kaiser Permanente
Kaiser Permanente
Kaiser Permanente is an integrated managed care consortium, based in Oakland, California, United States, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney Garfield...
HMO), stated in a Kaiser Network "interactive web show" that the mandate has been at the heart of health care reform proposals in the United States
Health care reform in the United States
Health care reform in the United States has a long history, of which the most recent results were two federal statutes enacted in 2010: the Patient Protection and Affordable Care Act , signed March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 , which amended the PPACA and...
. In the same Kaiser network show, Dr. Len Nichols, Director of the Health Policy Program at the New America Foundation
New America Foundation
The New America Foundation is a non-profit public policy institute and think tank with offices in Washington, D.C. and Sacramento, CA. It was founded in 1999 by Ted Halstead, Sherle Schwenninger, Michael Lind and Walter Russell Mead....
, called an individual mandate an "absolutely necessary" pre-condition to universal health care
Universal health care
Universal health care is a term referring to organized health care systems built around the principle of universal coverage for all members of society, combining mechanisms for health financing and service provision.-History:...
: he stated that, without a mandate, only a maximum of about half of uninsured Americans would likely obtain coverage under any non-compulsory reform. A 2008 AHIP/Kaiser forum cited Dutch and Swiss mandates (see below); AHIP's published report does not mention penalties but says Switzerland "enforces the rules in many ways..." In October 2009, Kaiser Health News reported that "the mandate has become a target for both Democrats and Republicans" and stated, "The insurance industry is clearly worried about the mandate being defanged."
Opponents such as Michael Cannon, Director of Health Policy Studies at the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
, make a philosophical argument that people should have the right to live without government social interference as a matter of individual liberty. He has stated that federal, state, and local governments are not willing or able to raise the necessary funds to effectively subsidize people who cannot currently afford insurance. He has also stated that the costs of increasing coverage are far higher than other reforms, such as reducing the amount of errors and accidents in treatment, which would accomplish as much or more benefit to society.
Writing in the Huffington Post, Michael Moore
Michael Moore
Michael Francis Moore is an American filmmaker, author, social critic and activist. He is the director and producer of Fahrenheit 9/11, which is the highest-grossing documentary of all time. His films Bowling for Columbine and Sicko also place in the top ten highest-grossing documentaries...
criticized mandates as part of a "massive government bailout for the insurance industry." On FireDogLake
Firedoglake
Firedoglake is a US collaborative blog which primarily specialises in covering news from a left-progressive/left-liberal stance...
, Jane Hamsher
Jane Hamsher
Jane Hamsher is a US film producer, author, and blogger best known as the author of Killer Instinct, a memoir about co-producing the 1994 movie Natural Born Killers with Don Murphy and others, and as the founder and publisher of the politically progressive blog FireDogLake...
called it "lemon socialism
Lemon socialism
"Lemon socialism" is a pejorative term for government support of private-sector companies whose imminent collapse is perceived to threaten broader economic stability. Some assert it is not a subcategory of socialism per se; rather, it points to a corruption of free-market capitalist systems, which...
." Consumer Watchdog (CWD)
Consumer Watchdog (USA)
Consumer Watchdog is a non-profit, progressive organization which advocates for taxpayer and consumer interests, with a focus on insurance, health care, political reform, privacy and energy....
writes, "Requiring people to buy unaffordable and unreliable insurance policies is not the solution to the health care crisis;" CWD's John Simpson added, "Mandating that everyone must buy insurance from private companies simply guarantees huge profits for the industry." Interviewed on Democracy Now!
Democracy Now!
Democracy Now! and its staff have received several journalism awards, including the Gracie Award from American Women in Radio & Television; the George Polk Award for its 1998 radio documentary Drilling and Killing: Chevron and Nigeria's Oil Dictatorship, on the Chevron Corporation and the deaths of...
, Ralph Nader
Ralph Nader
Ralph Nader is an American political activist, as well as an author, lecturer, and attorney. Areas of particular concern to Nader include consumer protection, humanitarianism, environmentalism, and democratic government....
said people are "being forced to buy junk insurance policies" and called the bill's imminent enactment "a disaster."
On CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
, Lou Dobbs Tonight
Lou Dobbs Tonight
Lou Dobbs Tonight is an American editorial commentary and discussion program hosted by Lou Dobbs, previously broadcast on CNN and currently on Fox Business Network. The hour-long show aired live on evenings every weekday, and was replayed in the overnight/early morning hours. It covered the major...
analyzed the financial costs of an individual mandate and quoted The Politico
The Politico
The Politico is an American political journalism organization based in Arlington, Virginia, that distributes its content via television, the Internet, newspaper, and radio. Its coverage of Washington, D.C., includes the U.S. Congress, lobbying, media and the Presidency...
's Nia-Malika Henderson: "the individual mandate is really going to rub a lot of people the wrong way." Summarizing published sources of the debate from 2007 through 2009, James Joyner
James Joyner
James Joyner is best known as the founder and editor-in-chief of the weblog Outside The Beltway and a frequent contributor to TCS Daily .-Career:...
concluded: "Forcing Americans to buy health insurance regardless of whether they want it or can afford it is extremely controversial, with not only Republicans but most of the Democratic contenders for the presidency in 2008 opposing it."
There is also disagreement as to whether federal mandates can be constitutional. In 2010, a majority of the 50 states filed litigation contending the individual mandate is unconstitutional, and newly elected Republican governors campaigned promising to add their states to the list in 2011; federal district courts have split on the constitutionality issue, which is expected ultimately to reach the Supreme Court; also, state legislative actions may at least cause delay. The Militia Acts of 1792, based on the Constitution's militia clause (in addition to its affirmative authorization to raise an army and a navy), would have required every "free able-bodied white male citizen" between the ages of 18 and 45, with a few occupational exceptions, to "provide himself" a weapon and ammunition; however, it was never enforced so its constitutionality was never litigated. In 1994, the Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
issued a report describing an individual mandate as "an unprecedented form of federal action." The agency also wrote, "The government has never required people to buy any good or service as a condition of lawful residence in the United States."
In a September 2010 working paper, a forthcoming article in the NYU Journal of Law and Liberty, and a lecture given at NYU, Randy Barnett
Randy Barnett
Randy E. Barnett is a lawyer, a law professor at Georgetown University Law Center, where he teaches constitutional law and contracts, and a legal theorist in the United States...
of Georgetown University Law Center
Georgetown University Law Center
Georgetown University Law Center is the law school of Georgetown University, located in Washington, D.C.. Established in 1870, the Law Center offers J.D., LL.M., and S.J.D. degrees in law...
argues that the mandate is unconstitutional under the doctrine of the Commerce and Necessary and Proper Clauses, and that enforcing it is equivalent to "commandeering the people." Penalizing inaction, he argues, is only defensible when a fundamental duty of a person has been established. He also notes that Congress fails to enforce the mandate under its taxing power because the penalty is not revenue-generating according to the Act itself.
Public opinion polls from 2009 through 2011 continue to find that most Americans reject penalizing people for not buying health insurance. In 2010, voters in at least three states enacted ballot measures to block the individual mandate, "laying the foundation for future legal challenges... Oklahoma approved an opt-out ballot initiative by a 2-to-1 margin. Proposition 106 in Arizona gained 55 percent of the vote while Colorado's Amendment 63 was trailing early Wednesday morning. Missouri voters approved a similar measure, Proposition C, with 71 percent support on a primary ballot in August." In November 2011, the issue will appear on the ballot in Ohio, where a Quinnipiac Poll of registered voters found that "when asked if they agree with a mandate that they obtain coverage or face fines, opposition jumped to 67 percent, with just 29 percent backing the mandate."
US States
A 2005 Massachusetts law mandating health insurance, in part by offering subsidized insurance programs to poor and lower income residents, replaced 28% of unpaid hospital visits with a 28% increase in taxpayer subsidized insurance (MassHealth and Commonwealth Care). Contrary to supporters' claims that insurance coverage and preventive care would save money by reducing emergency visits, in fact both emergency visits and costs increased significantly. Before the law was passed, per capita health care costs in Massachusetts were the highest for any part of the country except D.C. and after the law passed insurance premiums there increased faster than the rest of the United States with premiums reported to be the highest in the country. The Wall Street Journal reported that mandates squeezed "those in the middle" in Massachusetts. Writing in the New York TimesThe New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
opinion blog
Blog
A blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...
"Room for Debate," single-payer health care
Single-payer health care
Single-payer health care is medical care funded from a single insurance pool, run by the state. Under a single-payer system, universal health care for an entire population can be financed from a pool to which many parties employees, employers, and the state have contributed...
advocate Marcia Angell
Marcia Angell
Marcia Angell, M.D. is an American physician, author, and the first woman to serve as editor-in-chief of the New England Journal of Medicine...
(a former editor-in-chief of the New England Journal of Medicine
New England Journal of Medicine
The New England Journal of Medicine is an English-language peer-reviewed medical journal published by the Massachusetts Medical Society. It describes itself as the oldest continuously published medical journal in the world.-History:...
), said that a coverage mandate would not be necessary within a single-payer system and that even within the context of the current system she was "troubled by the notion of an individual mandate." She described the Massachusetts mandates as "a windfall for the insurance industry" and wrote, "Premiums are rising much faster than income, benefit packages are getting skimpier, and deductibles and co-payments are going up."
Other states do provide community rating
Community rating
Community rating is a concept usually associated with health insurance, which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status.Pure community rating...
and guaranteed issue, without mandates and with lower premiums than Massachusetts. For example, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, which borders Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
, requires pure community rating and individual guaranteed issue.
Japan
JapanJapan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
has a universal health care system that mandates all residents have health insurance, either at work or through a local community-based insurer, but does not impose penalties on individuals for not having insurance. The Japanese health ministry
Ministry of Health, Labour and Welfare (Japan)
The ' is a cabinet level ministry of the Japanese government. It is commonly known as Kōrō-shō in Japan. This ministry provides regulations on maximum residue limits for agricultural chemicals in foods, basic food and drug regulations, standards for foods, food additives, etc.It was formed with...
"tightly controls the price of health care down to the smallest detail. Every two years, the doctors and the health ministry negotiate a fixed price for every procedure and every drug. That helps keep premiums to around $280 a month for the average Japanese family." Insurance premiums are set by the government, with guaranteed issue and community rating. Insurers are not allowed to deny claims or coverage, or to make profits (net revenue is carried over to the next year, and if the carryover is large, the premium goes down). Around 10% evade the compulsory insurance premium; municipal governments do not issue them insurance cards, which providers require. Voluntary private insurance is available through several sources including employers and unions to cover expenditures not covered by statutory insurance, but this accounts for only about 2% of health care spending. Generally, doctors cannot deny care to patients in the low-priced universal system because if they did, they would "go out of business." Total spending is around half the American level, and taxpayers subsidize the poor.
Australia
AustraliaAustralia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
's national health insurance
National health insurance
National health insurance is health insurance that insures a national population for the costs of health care and usually is instituted as a program of healthcare reform. It is enforced by law. It may be administered by the public sector, the private sector, or a combination of both...
program is known as Medicare, and is financed by general taxation including a Medicare levy on earnings; use of Medicare is not compulsory and the tax code encourages people to buy private insurance. Individuals with high annual incomes (A$70,000 in the 2008 federal budget) who do not have specified levels of private hospital coverage are subject to an additional 1% Medicare Levy Surcharge. People of average incomes and below may be eligible for subsidies to buy private insurance, but face no penalty for not buying it. Private insurers must comply with guaranteed issue
Guaranteed issue
Guaranteed issue is a term used in health insurance to describe a situation where a policy is offered to all applicants, regardless of the health status of the applicant...
and community rating
Community rating
Community rating is a concept usually associated with health insurance, which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status.Pure community rating...
requirements, but may limit coverage of pre-existing ailments for up to one year to discourage adverse selection
Adverse selection
Adverse selection, anti-selection, or negative selection is a term used in economics, insurance, statistics, and risk management. It refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information : the "bad" products or services are more likely to be...
.
The Netherlands
The NetherlandsNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
has a health insurance mandate and allows for-profit companies to compete for minimum coverage insurance plans, though there are also mutual insurers so use of a commercial for-profit insurer is not compulsory. The government regulates the insurers and operates a risk equalization
Risk equalization
Risk equalization is a way of equalizing the risk profiles of insurance members in order to avoid loading premiums on the insured to some predetermined extent.- Health care :...
mechanism to subsidize insurers that insure relatively more expensive customers. Several features hold down the level of premiums which facilitate public compliance with the mandate. The cost of health care in the Netherlands is higher than the European average but is less than in the United States. Half of the cost of insurance for adults is paid for by an income-related tax with which goes towards a subsidy of private insurance via the risk reinsurance pool operated by the regulator. The government pays the entire cost for children. Forty percent of the population is eligible for a premium subsidy. About 1.5 percent of the legal population is estimated to be uninsured. The architects of the Dutch mandate did not envision any problem with non-compliance, the initial legislation created few effective sanctions if a person does not take out insurance or pay premiums, and the government is currently developing enforcement mechanisms.
Switzerland
SwitzerlandSwitzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
's system approximates to that of the Netherlands with regulated private insurance companies competing to provide the minimum necessary coverage to meet its mandate. Premiums are not linked to incomes, but the government provides subsidies to lower-class individuals to help them pay for their plans. About 40% of households received some kind of subsidy in 2004. Individuals are free to spend as much as they want for their plans and buy additional health services if desired. The system has virtual universal coverage, with about 99% of people having insurance. The laws behind the system were created in 1996. A recent issue in the country is their rising health care costs, which are higher than European averages. However, those rising costs are still a little less than the increases in the United States.
United States
FederalFederal
Federal or foederal may refer to:In politics:*Federal monarchy, a federation of monarchies or a federal organised monarchy*Federal district, a subdivision in a federal state that is under the direct control of a federal government...
insurance legislation signed in 2010 includes both employer and individual mandates to take effect in 2014, but it is controversial and is being widely challenged in federal courts. As of 2011, more than half the states and several organizations and individuals are suing to challenge the mandate in federal courts, and the decisions so far have divided almost evenly; the issue is expected to be decided by the United States Supreme Court. In August 2011, after a federal district court judge invalidated the entire legislation based on the individual mandate provision being unconstitutional, a divided three-judge panel of the U.S. 11th Circuit Court of Appeals based in Atlanta affirmed in part: the panel agreed the individual mandate was unconstitutional, but decided that it could be severed, allowing the rest of the statute to remain. The Obama Administration decided not to ask the full Appeals Court to review the decision and instead directly asked the Supreme Court to hear the case.
France and Germany
In the two largest EU countries, FranceFrance
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Statutory Health Insurance (SHI) mandates employers and employees pay into statutory sickness funds. In France, private health insurance (PHI) is voluntary and used to increase the reimbursement rate from the statutory sickness system. The same applies in Germany where it is also possible to opt out of SHI if you are a very high earner and into a PHI but if a person has reached the age of 55 and is in the PHI sector he or she must remain covered by PHI and cannot opt back into SHI. Persons who are unemployed can usually continue their payments through social insurance
Social insurance
Social insurance is any government-sponsored program with the following four characteristics:* the benefits, eligibility requirements and other aspects of the program are defined by statute;...
and the very poor receive support from the government to be insured. Most workers are insured through compulsory membership of "sickness funds" that are non-profit entities established originally by trades unions and now given statutory status. In Germany and France, as is the case with most European health care finance, the personal contribution to health care financing varies according to a person's income level and not according to their health status. compliance with the mandate is high. Only 0.2% of Germans are uninsured, mainly self-employed, rich and poor, and persons who have failed to pay contributions to the statutory insurance or premiums to the private health insurance. Between 1990 and 2000 the share of French SHI income coming directly from employees via salaries fell from around 30% to just 3% and employer direct contributions also fell. The difference was made up by a rise in income from government taxation, thus widening the mandatory contribution base to the health insurance system.
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