Mandated insurance has varied list of foes

WASHINGTON – If there is one thing in the proposed congressional health care overhaul that sets Michael Cannon’s libertarian teeth on edge, it’s the requirement that all Americans get health insurance.

“The federal government does not have the power to force you to purchase a private product,” said Cannon, a health policy analyst at the Cato Institute, a free-market think tank in Washington.

But with Congress poised to do just that, the mandate for near-universal coverage is generating opposition not only from libertarians like Cannon, who object to the guiding hand of government regulation in almost any form, but from some liberals as well – and even from some members of the insurance industry, which stands to gain millions of new customers.

Both the House and Senate versions of the health care revamp contain a requirement that everyone have health insurance, through their job, the government or the private market.

In theory, the justification seems simple: A large number of people pay relatively modest premiums, creating a pool of money big enough to take care of those who need help. Having people of all ages participate is especially important with health care, analysts note, because the major medical problems that result in big claims are found disproportionately in middle-age and older Americans.

If younger, healthier people go without insurance, premiums for the others would be driven higher.

But even as right-wing critics talk of legal challenges, critics on the left complain that Americans will be locked into buying a product that threatens to become ever more expensive – especially if, as seems likely, the final bill does not contain a government-run insurance program to compete with private firms, the so-called “public option.”

“We’d like to see the individual mandate stripped,” said Jim Dean, chairman of the liberal Democracy for America, which was created by Dean’s brother, former Vermont Gov. Howard Dean.

The mandate “was fair given the presence of a government entity that could provide competition and control the cost,” Jim Dean said. “It’s not fair if people are required to buy insurance from the same insurance industry that caused this problem in the first place.”

Mainstream Republicans also have adopted the no-mandate war cry, led by a group of more than a dozen state attorneys general who are exploring whether the mandate is unconstitutional.

“It’s a tax on living,” said Florida Attorney General Bill McCollum, drawing a distinction from a requirement that people buy auto insurance. Drivers make a choice to own a car, McCollum said.

The insurance industry, meantime, is unhappy for a different reason: that the penalty for failing to buy insurance is too mild. That could result in young, healthy people choosing to pay a relatively small tax penalty rather than buy insurance.

“We think there’s more that (the bill) needs to do,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans. “There’s still a strong incentive for people to wait until they are sick to purchase insurance.”

That incentive exists, ironically, because of another provision in the legislation – that insurers treat those with pre-existing medical conditions the same as everyone else and end practices that deny coverage to patients in other ways.

Once insurance companies must sell policies to almost all comers, “the incentive is to pay the penalty until you need the insurance – and then buy it,” said Robert Book, a health economist with the Heritage Foundation. “You are likely to have more people go uninsured because now it’s less risky to be uninsured.”

Critics such as Book warn that if young, healthy people opt out of the individual market in large numbers, those who buy insurance will tend to be sicker. That will cause premiums to increase, which, in turn, will prompt more young people to forgo insurance and pay the penalty.

Linda Blumberg, a researcher with the Urban Institute, says most public resistance stems from sketchy details about the new insurance exchanges.

“There’s a lack of information about what they’re going to pay and what they’re going to get,” Blumberg said.