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Key Studies in CDHC Classic Articles in CDHC History of the HSA

 

 

Mandatory Health Insurance Unlikely To Decrease Uninsured Ranks

September 06, 2006

     Can the problem of the growing number of people without health insurance be solved by passing a law mandating its purchase?  A budding bi-partisan 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 new report from the National Center for Policy Analysis (NCPA) cautions that experience with mandates in auto insurance shows mandating health insurance may not work.

 

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

 

     The NCPA report notes that all but three states mandate auto insurance, while no state mandates health insurance yet.  However, the average rate of all the states for uninsured motorists was 13.2 percent, compared to 15.7 percent for health. 

 

            Most of the variation could be explained by two variables: 1) the rate of poverty in the state and 2) the level of health care costs in the state.  For example:

 

  • A 10 percent increase in the poverty rate was associated with a 7.4 percent increase in the uninsured rate for auto and a 7.1 percent increase in noninsurance for health. 
  • A 10 percent increase in the cost of health care was associated with an 11 percent decline in the uninsured rate for auto and an 8.5 percent decline for health insurance.
  • Mandatory coverage had no significant effect for the rate of auto coverage.

 

            "If the effect of a mandate to buy insurance is small for auto coverage, it will be even less with health coverage," said 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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