The Uninsured and Affordability
Letter to the Editor

Wilson H. Taylor Scholar Joseph Antos
Wilson H. Taylor Scholar Joseph Antos
In their paper about mandating health insurance (Nov/Dec 07), Sherry Glied and colleagues offer suggestions for making such a mandate more effective in increasing the number of people with health coverage: compliance should be easy and relatively inexpensive, penalties for noncompliance should be large enough to matter but not too burdensome, and enforcement should be aggressive. An additional requirement, not mentioned by the authors, is widespread agreement by the public that the mandate is necessary and desirable--even when it is applied to them.

On all of these counts, a mandate is likely to fail if it is a prerequisite to reform and unnecessary if more difficult steps are taken to lower the cost of coverage and improve the value offered by health insurance. By focusing narrowly on the mechanics of a mandate, Glied and colleagues do not consider whether the coverage itself is affordable and attractive. Massachusetts' $219 tax penalty for 2007 for being uninsured pales into insignificance compared with a premium for single coverage, which ranges from $2,100 to more than $6,000 annually. The 2008 penalty jumps to as much as half the cost of the premium--too severe to be levied on many uninsured people. By exempting nearly 20 percent of uninsured adults, the state's Connector Board recognized that the mandate would be a continuing source of political controversy and ineffective in increasing unsubsidized coverage unless the cost of insurance could be brought down.

When a mandate appears necessary because people are not willing to buy insurance, it is unsustainable. The solution is not tougher noncompliance penalties or higher taxes to finance more generous subsidies or more restrictive insurance regulation. Instead of attempting to micromanage the health sector, sensible policy would take advantage of market incentives to reduce inefficiency and promote a high-value health care system.

Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI.

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