Argument: Mandatory insurance can be subsidized for the struggling


Paul Hsieh. “Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America”. The Objective Standard. Fall 2008: “Costs to the state government have skyrocketed and are projected to run hundreds of millions of dollars over budget. Because the mandated insurance is so expensive, the government has had to subsidize the costs of the premiums not only for lower-income residents, but also for residents with incomes as high as $60,000 for a family of four—which is three times the Federal Poverty Level.17 The state had expected a ‘significant drop in spending . . . for the uninsured” but has since acknowledged that this ‘is not going to happen to any large extent in 2009.’ Instead, overall costs to the state have risen by more than $400 million, 85 percent more than originally projected.

Substantial government resources — approximately $43 billion in 2008 — are currently devoted to supporting a minimal level of health care services for the uninsured. The federal government provides disproportionate-share hospital funds to safety-net hospitals through Medicare and Medicaid, and state and local governments provide varying levels of funding for uncompensated care. Care provided in this way varies considerably by locale and does not amount to continuous, comprehensive care for the uninsured, nor do all the uninsured have access to such publicly subsidized services. Once everyone has health insurance coverage, either public or private, these funds can be redirected to help finance a new system that includes income-related subsidies for care provided in efficient health systems. However, if the number of uninsured Americans remains substantial, it will be politically difficult to redirect these funds to support subsidies for insurance. And research leaves no doubt that without an individual mandate, many people will remain uninsured.

The cost of subsidies will be relatively high, but most subsidies will go to benefit the poorest and sickest — those who are most likely to enroll on a voluntary basis. Thus, a mandate will tend to bring healthier people and those with higher incomes into the system at a relatively low incremental cost, as compared with a voluntary approach — and with the added benefit of government financing redirected from the programs that currently cover uncompensated care.”