Repealing the Individual Health Insurance Mandate Restricts Freedom

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    Having universally available, quality health insurance frees Americans from the fear of crippling medical debt or unmanaged illness
    As with compulsory auto insurance, mandatory health insurance provides financial security

Two short months after they appeared to move past their campaign to dismantle the Affordable Care Act (ACA), Senate Republicans passed a tax reform package that includes a repeal of the law’s individual health insurance mandate. House Republicans have indicated they will follow suit.

The mandate is an easy target. Since before the ACA was passed, it has been portrayed as un-American. President Trump articulated this criticism during his inaugural address to Congress, when he argued that “mandating that every American buy government-approved health care was never the right solution for our country.” It has also been labeled anti–free market, and it has been called an affront to personal freedom.

It is none of these things.

An individual mandate to purchase health insurance was first proposed in the U.S. by the conservative Heritage Foundation, which in 1989 saw it as a way of creating healthy insurance pools, a solution to what they saw as the “free-rider” problem in health care, and as an alternative to a single-payer system. It was first passed into law by Mitt Romney, the Republican governor of Massachusetts, who promoted it as a market-based idea grounded in the principle of individual responsibility.

Does the individual mandate restrict freedom? Yes, but not unreasonably, and it isn’t unique in this regard. The 49 state laws requiring drivers to carry auto insurance also restrict individual freedoms, as do fishing licenses and nearly all taxes. In the case of compulsory auto insurance, every state except New Hampshire has made the calculation that the harm of curtailing freedom is outweighed by associated goods — for compulsory auto insurance this is the sense of security one gets from knowing that if a faulty driver hits you he or she will have the means to pay your medical bills or repair your car. When one turns to health insurance, the associated goods are much more profound.

The benefit of the individual insurance mandate derives from the collective goods we all receive from increased participation in insurance markets — these include lower rates of uncompensated care, healthier insurance markets, and ultimately lower premiums and better access to health care. It helps makes the ACA marketplaces sustainable, thereby giving millions a source of comprehensive health insurance, and millions more the peace of mind knowing that they have a place to go if they ever need to buy it.  For these last reasons, the individual mandate actually enhances freedom. Having universally available, high-quality health insurance frees us from the fear of being one illness away from financial ruin, from being tethered to a job (or relationship) because it is the only means of coverage, and frees us and our loved ones from the physically or financially disabling effects of an unmanaged illness.

Repealing the individual mandate and the destabilizing of health insurance markets that will follow will harm a lot of Americans. The Congressional Budget Office projects that 13 million people will lose their health insurance because of the repeal.

Nonetheless, Republicans appear poised to move ahead. Crippling the marketplaces hasn’t garnered the ire of key Republican governors who weighed in strongly on the large Medicaid cuts proposed as part of earlier repeal bills. And senators who may have been concerned about the consequences of repeal cared more about passing tax reform — a must-have political victory for Republicans.

The other reason why this newest attack on the ACA may be more successful than earlier ones is that, from the outset, the individual mandate has never had strong public support; it polls lower than other key provisions and has been the target of a disproportionate share of the harsh rhetoric aimed at the law. The Obama administration was never able to sell the public on the connection between a strong mandate and high-quality, affordable health insurance, so for some it has felt like pointless government intrusion.

Regardless of how people feel about the mandate, the facts are clear: millions of Americans have benefited from it and live more freely because of it. Congress should remove the individual mandate repeal from the tax bill to help ensure that 13 million people don’t lose the freedoms it has given them.

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Publication Details

Publication Date: December 8, 2017
Authors: Donald Moulds
Contact: Donald Moulds, Executive Vice President for Programs, The Commonwealth Fund
E-mail: dbm@cmwf.org
Citation:
D. Moulds, “Repealing the Individual Health Insurance Mandate Restricts Freedom,” To the Point, The Commonwealth Fund, Dec. 8, 2017.

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