Paul Krugman says Obama's health care plan is pretty good but with a crucial flaw: "The Obama plan doesn’t mandate insurance for adults. So some people would take their chances — and then end up receiving treatment at other people’s expense when they ended up in emergency rooms. In that regard it’s actually weaker than the Schwarzenegger plan." This is true, but I think it's a pretty minor issue. Len Nichols puts the more important element of the case for mandates thusly:

Mandates go a long way toward correcting this "adverse selection" problem by putting everyone in the same risk pool. If everyone is required to buy, then insurers worry far less about attracting a disproportionate share of sicker patients, because the reluctant "young immortals" are buying, too. So the excess resources they now devote to underwriting and targeted marketing will be largely redundant and disappear. This is why John Sheils of The Lewin Group concluded that Senator Wyden's plan achieves such great administrative savings -- insurers will voluntarily disarm if everyone has to buy, and then the rest of us can stop paying them to figure out how to legally deny coverage to the sick.



This is the best way to understand things. Under a mandate/subsidize scheme like Edwards' plan, you have two different ways of trying to make health care more affordable. On the one hand, you have direct subsidies provided by the government out of tax revenues. On the other hand, you have indirect subsidies provided by young healthy people who are forced to buy insurance at an actuarially unfair rate to cross-subsidize insurance for higher-risk people.

If the genuine focus of your mandate concern was Krugman's emergency room patients, then you could just mandate that everyone carry a high-deductible plan (this would be closer to the car insurance analogy that sometimes gets bandied about) and alleviate that. The real issue is that the mandate is supposed to be a way to resolve adverse selection issues while still retaining some of the structural properties of a competitive market. As it happens, my view is that mandates will -- if tried -- prove to be wildly less effective at achieving this goal than their proponents believe, but I'm in the distinct minority on this.