How would we enforce mandatory health coverage?

September 25, 2007|By Jim Jaffe

There's growing bipartisan support among presidential aspirants for requiring Americans to buy health insurance as a component of a health reform package.

That's a superficially attractive idea that would seem to simultaneously eliminate problems for the uninsured who can't pay needed care and for providers who raise rates on others because of unpaid bills.

But how will the new system deal with those who fail to buy the required insurance? There will be more than a few of them.

From one perspective, this strategy is not unlike saying that the federal budget would be easily balanced if we all paid the taxes we owed. That's true enough. The Internal Revenue Service only collects about 85 percent of the taxes due. The uncollected amount would be more than enough to eliminate the deficit. But that's easier said than done. Estimates differ on how much could be collected if the IRS were tougher, but no one believes it could collect even half the amount owed.

By coincidence, about 15 percent of Americans lack health insurance. Many simply fail to sign up for free coverage that they're eligible for. About 30 percent of the uninsured kids in America would be covered if their parents enrolled them.

More than a third of employees who are offered insurance at work opt out. Most of them get coverage elsewhere, but nearly a quarter simply go without insurance. These are people who think they have more important things to do with their money. Some will feel that way even if the price is cut. That's not necessarily irrational, particularly if you're among the healthiest 50 percent of the population that accounts for only 3.4 percent of the nation's annual health bill.

Many of them would also not participate in Social Security and Medicare if they could opt out. But they don't have that choice, which explains why the participation in these two programs is nearly 100 percent.

Experience has shown that it is much easier to enforce such laws on a relatively small number of employers rather than on a very large number of workers. One can envision a system where employers would be required to verify that workers had insurance, regardless of where they got it.

It is painful to imagine that efforts to provide better health care could somehow result in government agents' rounding up and prosecuting those who didn't buy insurance. But any such universal system will inevitably require such an enforcement effort, and experience with our tax system suggests that requiring universal coverage won't come quickly or painlessly.

Jim Jaffe is vice president of public affairs for the Center for the Advancement of Health. His e-mail is jjaffe@cfah.org.

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