When Washington begins penalizing people for not purchasing health insurance in 2014, it will mark the first time in history the federal government has required nearly all Americans to buy a private product as a condition of lawful residence in the U.S. No part of the health-care law is less popular, or more essential to preventing it from crumbling like a house of cards, than this individual mandate.
Even if the mandate were popular and constitutional, it would still be a bad idea. It will increase premiums, cost shifting and government rationing, while promoting irresponsibility. Indeed, its entire purpose is to enable supporters to avoid responsibility for their decisions.
Let's start with premiums. The mandate will increase premiums for households who currently do not purchase coverage, and tens of millions more (including at least half of employer-sponsored plans) who will have to purchase additional coverage to satisfy the mandate. A study issued by the left-leaning Commonwealth Fund estimates the law has already increased premiums 1.8% on average. That will rise as the mandate takes full effect. Some of the increase will reflect the cost of additional coverage—but if consumers valued that coverage, they would have bought it already.
True, the law will force insurers to reduce premiums for the sick, and the mandate will magnify that effect. But those same government price controls will increase premiums for healthier customers—and the mandate will magnify that effect, too. (Economist Jonathan Gruber, one of the law's biggest proponents, projects that for some who buy policies in the individual market, premiums will more than double.) At best, those two effects cancel each other out. But these provisions also create incentives for healthy people to drop coverage, driving average premiums higher still.
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