Health Care Reform 101-Mandates
Understanding Health Insurance- Individual and Other Mandates
Sep 9, 2009
When it comes to both staying healthy as an individual, and having a healthy national system of health care, there's a role for both the carrot and the stick.
On the carrot side, many employers have added sweet incentives to their benefits packages to encourage people to go to the gym (for instance, by offering discounted gym memberships). And unfortunately the consequence of having poor health can sometimes be loss of both a job - and the health insurance that comes with that job.
A Health Care Issue Affecting All Americans
There's general agreement about the diagnosis for an ailing American health care system.
We have too many uninsured citizens, combined with rapidly escalating costs. And, US national health statistics aren't as good as those in other industrialized nations that spend less on health care services.
Carrot and Stick of Health Care Reform
But while there's agreement among people of all political persuasions that somethings wrong with the US health care system, there are vastly different ideas for fixing our nation's health care system are being discussed, and in some cases, piloted.
On the carrot side of the equation, people who stay healthy often enjoy lower insurance premiums. They save money.
On the stick side of the equation, however, is a controversial legislative tool called "mandates."
What's a Mandate
A mandate is a law or regulation enacted by government that have to be implemented, usually by a state government. The term dates from the 1500s, and it has the aura of a "command." In other words, a mandate is far stronger than a mere suggestion.
Mandates are controversial, thanks to robust disagreements among Americans about how much regulatory clout government should wield. Advocates of comprehensive health reform support more and broader mandates. Generally, of course, free market advocates favor a minimum of government mandates.
In the 2009/10 health care reform debate, different kinds of "mandates" are being discussed as a way to simultaneously slow the soaring rate of health care cost increases, and provide more coverage for more, if not all, Americans.
Employer Mandate
Historically, Americans have received health insurance through the workplace. As recently as 2006, according to a RAND report, three in five working Americans did so.
The "employer mandate" strategy is an effort to reinforce the current job-based insurance system.
Sometimes also known as "mandated health benefits," this approach would require employers to pay a portion of the costs of health coverage for their employees, or offer (but not necessarily pay for) health insurance benefits. Hawaii enacted an employer mandated health insurance system on the state level decades ago. The much-discussed 2006 Massachusetts comprehensive health care reform plan includes an employer mandate as a way to provide universal coverage for residents of the state. That law uses several different tools, including an individual mandate, and a newly formed state-run insurance purchasing pool.
Employer mandates are not cookie-cutter, one-size-fits-all plans. There's great variability in how mandates might be structured. They can vary by the size of the firms required to offer insurance, and the kind of insurance they are required to offer.
It's worth noting that employment-based insurance has been eroding for some time. That trend has accelerated since the rise in unemployment in 2009, leaving many Americans without any health insurance at all.
Individual Mandate
Conceived as a way to reduce the numbers of uninsured Americans, the idea of an individual mandate is that each person should be responsible for obtaining health insurance, either through an employer, an individual plan, a purchasing pool, or a public insurance program
This policy addresses the fact that many young, healthy Americans are without health insurance. (This has two effects. First, if that young healthy man or woman gets sick or has an accident, they are likely to use the emergency room if they have no insurance, and that's an expensive way to obtain health care. The second factor is that young people, when averaged in with the rest of the population, lower overall costs.)
Mandated Health Benefits
These are specific health benefits required by federal or state law. Some laws require specific benefits to be included in a health insurance plan, such as prenatal care. Things that are not subject to mandates are an individual’s health behavior, for instance exercising, eating a healthy diet, not smoking, and having regular check-ups.
The great health reform debate of 2009-2010 will affect all Americans. For concerned citizens to understand the health care reform debate, and how it will impact one's own family and the nation's economic health, it's important to understand the concept of a health care mandate.
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