Imagine that you are a healthy 30-year-old young man who has a respectable job, makes a good living, but decides, you know what? I am not going to spend $200 or $300 a month for health insurance because I am healthy, I do not need it. But something terrible happens, suddenly you fall into a coma and need it.
Who is going to pay for your coverage? In a society where you accept welfarism and socialism to be the answer, you would expect the government to take care of you. Well, that is exactly how the federal health care system works in that those choices are made for you in the first place through the individual mandate.
Adjusted for inflation, total national health expenditures have risen from $409.6 billion to $4.2551 trillion over the 51-year span of 1970 to 2021. That is almost a 1000% increase. No government health care plan or initiative has solved this problem. For 50 years, these healthcare costs have outpaced inflation every single year.
With the rising costs, healthier individuals would be more likely to opt out of health insurance, since they make fewer claims, and their premiums support the claims of the less healthy. Insurance companies would then raise rates for the less healthy to make up for the lost revenue. That further increases the pressure on healthier individuals to opt out of buying health insurance, which will further increase rates.
Mandated health insurance was intended to end this spiral. The individual mandate was first brought to the mainstream by Massachusetts Governor Mitt Romey in 2006. He characterized the mandate as “the ultimate conservative idea” and that “people have responsibility for their own care, and they don’t look to government to take care of them when they can afford to take care of themselves.” Once a state policy, quickly expanded. In 2010, the Affordable Care Act, coined “Obamacare” created the standard for modern healthcare. The individual mandate was a part of Obamacare, which required Americans to obtain a minimum amount of healthcare coverage if they do not qualify for an exception.
There are many issues with the individual mandate framework. First off, when health care is dumped on the government, it becomes a bureaucracy; then the hospitals and drug companies can charge even higher prices because they know the government will pick up the tab. This applies to all government health care initiatives, not just mandates. Secondly, health insurance companies may raise their rates to extreme levels through collusion because they know that Americans are forced to pay for it. This is unfair, so the government would step in and regulate the price. Instead of market factors deciding the fair premium price in the first place, it adds a double layer of government regulation. Some proponents argue that the individual health insurance mandate is just like the auto insurance mandate that all must pay if they own a vehicle. However, Americans do not have to buy a car or motorcycle if they do not want to. But life is not a product that you can buy and sell, it is something you live with.
In 2012, National Federation of Independent Business v. Sebelius challenged the individual mandate aspect of the Affordable Care Act, among others. The court case was designed to hopefully settle the validity of ACA for the last time. It instead kicked the can down the road, as the court ruled the government had the right to enforce a tax on those who refuse to pay for private insurance, if it was not coercive. But this tax, no matter how small, was created as a punishment for people who do not purchase health insurance, hence coercion.
Healthcare costs then get spread out across all Americans. Unlike insurance itself, which is a completely voluntary form of risk management, the individual mandates force everyone to “chip in.” A very small percentage of people would get more out of a mandated insurance system than what they put in. In addition to the fraction that subsided the costs for the small percentage, the government, who acts coercive middleman, will take up hidden fees for mandate compliance, enforcement, etc., through taxes. So not only do health insurance abstainers not only run the risk of expensive hospital bills which is their own decision, but they also must pay a tax on it. Essentially, the government closes Door One almost all the way through coercion, while Door Two is wide open, and gives you the “choice” between both.