Do individual mandates matter?

In this brief, the authors conclude that, absent a single-payer system, it is impossible to achieve universal coverage without an individual mandate. They say there is strong evidence that voluntary measures alone would leave large numbers of people uninsured. Voluntary measures would tend to enroll disproportionate numbers of individuals with higher-cost health problems, creating high premiums and instability in the insurance pools in which they are enrolled, unless further significant government subsidization is provided. The government would also have difficulty redirecting current spending on the uninsured to offset some of the costs associated with a new program without universal coverage.

Their authors' contention that an individual mandate is critical to achieving universal coverage rests upon three points. First, many individuals will not choose to obtain coverage under a purely voluntary system. Second, adverse selection will occur under a voluntary insurance system. Third, it is politically difficult to redirect current government spending on care for the uninsured to offset the costs associated with new broad-based reforms unless the full population is insured.

Other analysts have reached similar conclusions. In a study that analyzed health reform options for the state of New York, the Lewin Group found that voluntary measures, including a public expansion and subsidized buy-in to a state health plan, reduced the number of uninsured by 29 percent. Adding an employer mandate (but not an individual mandate) to these voluntary measures reduced the number of uninsured by 36 percent. In an analysis extending the Massachusetts-type plan to the United States, Jon Gruber found that voluntary measures, including income-related subsidies and a purchasing arrangement, would reduce the number of uninsured by about 50 percent.

By the Urban Institute