Insurance Required

If mandatory insurance is good enough for your car...

Believe it or not, there is a politically appealing way to achieve universal health-care coverage: simply require all U.S. residents to buy insurance, with government help if necessary.

To understand why and how this might work, consider that the majority of those who lack health insurance are not unemployed. Nearly 60 percent of uninsured Americans work full time; another 16 percent work part time. These tend to be workers whose employers don't offer them health insurance (because they are low-wage or newly hired), or who can't afford to pay a share of the premiums.

In addition, about a third of the uninsured live in families with household incomes greater than $50,000 a year; many of these people could afford the costs of health insurance if they chose. Moreover, many of the uninsured are relatively young and healthy: about 40 percent are aged eighteen to thirty-four, and another 20 percent are under eighteen. This provides an opportunity. Requiring all these young, healthy Americans—who are currently gambling that they'll stay healthy—to enter the risk pool would drive down premiums for those Americans who currently have health insurance while lowering the cost of entry for those who don't.

Here's how it might work. States would establish insurance pools that would offer every American a choice among competing private insurance plans. Insurers offering coverage through these pools would be required to offer a core benefits package and could not discriminate on the basis of pre-existing conditions. Individuals could purchase more-comprehensive coverage if they wished.

Each year, according to a recent study published in the Annals of Family Medicine, 20 percent of people with insurance are forced to change health plans, resulting in higher costs and lower-quality care. A citizen-based (as opposed to employer-based) universal insurance program would eliminate this problem by enabling workers to keep their doctors and health plans when they changed jobs. And rather than being limited to the health plans chosen by their employers, workers could choose plans and levels of coverage from among competing private providers.

Under a universal citizen-based plan those employers who wished to continue administering health-care benefits could do so; but those who wanted to shed the administrative burden could choose instead to contribute a fixed amount (currently employers contribute more than $300 billion to employee health coverage each year) to an insurance pool or to the plans of their employees' choosing.

This proposal would cost the federal government somewhere on the order of $80 billion a year, with most of that money going to provide subsidies to those who couldn't afford the minimum cost of coverage themselves. But the plan would also save the nation the cost of uncompensated care (currently some $35 billion, which is passed on to employers and insured employees in the form of rising premiums), and it would recoup some of the $65 billion to $130 billion of labor productivity that is lost to untreated health problems each year.

Won't Americans balk at a radical proposal that forces even those who don't want health insurance to buy it? Actually, it's hardly radical: Americans are already well accustomed to the idea of mandatory insurance. After all, almost anyone who wants to drive a car is required to buy car insurance, and anyone who wants to carry a mortgage must buy homeowner's insurance. The details are different, but the idea is the same. Applying this principle—universal coverage in exchange for universal responsibility—makes economic, moral, and practical sense.