Insurance mandates prove useless

Can the problem of the growing number of people without health insurance be solved by passing a law mandating its purchase? A budding bipartisan movement believes it can, as evidenced by the recent reform signed into law in Massachusetts and endorsed by organizations on both the right and left. Yet, a report from the National Center for Policy Analysis, Dallas, Tex., cautions that experience with mandates in automobile insurance shows that the practice probably will not work with health insurance, either.

"Remarkably, there is little difference in uninsurance rates between auto and health care, even though driving is voluntary and enforcement is relatively easy," points out Greg Scandlen, author of the report and president of Consumers for Health Care Choices. "Thinking you can force people to buy insurance just because the legislature mandates it is naive at best."

Scandlen notes that all but three states mandate auto insurance, while none do so on the health side (not even Massachusetts)--at least not yet. However, the average rate for all states for uninsured motorists is 13.2%, compared to 15.7% for health insurance.

Most of the variation can be explained by states' rate of poverty and level of health care costs. For instance, a 10% increase in a state's poverty rate triggers a 7.4% jump in the uninsured rate for auto and a 7.1% spike in noninsurance for health. A 10% increase in the cost of a state's health care is associated with an 11% rise in the uninsured for auto, and 8.5% for health insurance.

"If the effect of a mandate to buy insurance is small for auto coverage, it will be even less with health coverage," insists Scandlen. "Not one state yet mandates health insurance, but people are covered anyway--at virtually the same rate as auto insurance."

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COPYRIGHT 2008 Gale, Cengage Learning