Health Insurance Mandate

Health Insurance Mandate


[GEAR WINDING] The individual mandate may
be the most unpopular part of the Affordable Care
Act and as a consequence, Republicans are against
it and want to repeal it. But if we’re going to get
everyone into the insurance pool, if we’re going to
get coverage for everyone, we need to have some
mechanism to persuade people, especially healthy
people, to buy insurance. Otherwise, healthy people
don’t buy insurance. The consequence is only
sick people buy insurance, premiums go up, people
stop buying insurance, and the marketplace falls apart. How do we get everyone
in and buying insurance? Well, we need a requirement
and there are only four ways of doing that. One is what’s done in
the Affordable Care Act, have a mandate. Require everyone
to have insurance and if you don’t
have insurance, you have to pay a financial penalty. A second way of doing
it is to say that you need continuous coverage. You have to have
insurance continuously. If you have too long a break
in your insurance coverage, you will be assessed
a penalty or not be able to buy insurance. A third way is to say that
you have to have insurance and if you don’t have insurance,
when you want to go in and buy insurance– say, because you’re
sick or you’re going to deliver a baby– you’re penalized because
your premiums have gone up substantially. And the last way is to not use
a stick, not to use a penalty, but to use a carrot
and say, well, we’re going to give basic insurance,
a minimal package to everyone, and then they can either
opt out and pay a penalty or they can increase
the services and use their own money to
buy additional services. Now, we use this higher premium
mechanism in Medicare Part D. Actually, if you don’t buy
Medicare Part D, the drug benefit, initially– you wait for three, four
years before you buy it– you pay a higher premium
for the rest of your life. We use the mechanism of giving
everyone a basic benefit and allowing them to buy up
in Medicare, where you get the hospital benefit, Part
A, and you can supplement that with Medigap coverage. It is the case that continuous
coverage and paying a higher premium if you don’t
initially buy health insurance don’t work perfectly. They don’t get everyone
to buy insurance, including the healthy people. Even in Medicare Part
D, the drug benefit, where most Medicare patients are
going to use drugs, about 20% of people do not buy Medicare
Part D when they are eligible. So we do need some mechanism to
get everyone to buy insurance and keep the premiums low,
get the healthy people as well as the sick people
to buy insurance, and there are only
four mechanisms to do it, a mandate, continuous
coverage, higher premiums if you don’t buy insurance,
or give everyone what’s called “auto enrollment,” a
basic benefits package. We’re going to have to
pick one of the four. If you don’t like a mandate,
you have to try other ideas. We should also remember that the
individual mandate, as disliked as it is, was originally
a Republican idea, not a Democratic idea. Democrats like the employer
mandate but Republicans like to put the
responsibility on individuals. Only when it proved
unpopular did Republicans decide
that they didn’t like the individual mandate. [GEAR WINDING] [WHOOSH] [GEAR WINDING] [WHOOSH]

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