What is Mandatory Health Insurance?

Mandatory health insurance is a requirement, under certain health care laws or proposals, that all citizens have health insurance. It is also known as the individual mandate. In many cases, people who don't purchase or otherwise receive health coverage would be subject to fines. The standards for employer and individual coverage may vary in different cases. In the United States, mandatory health insurance is a part of some state laws and the federal health care reform law of 2010.

All insurance, including health insurance, works on the principle that many people share the risk of certain events. In the US, many people less than the age of 30 have chosen not to buy health insurance. This has led to an older population that is more widely insured, but also more likely to need care for health problems. Also, as many choose not to buy insurance, the price of individual health care plans has probably remained higher than it otherwise might. Proponents of mandatory health insurance argue that requiring everyone to have health insurance would therefore lower costs for everyone.

In addition to lower costs, an individual mandate could also broaden coverage. Coverage would be expanded because individuals might choose to buy their own health insurance rather than pay penalties. This could lower the cost by making those who need less insurance, especially young people, share in the cost of health insurance. Also, the uninsured tend to raise the price of health care for others because they can't pay doctors and hospitals when they have health problems. That may force health care providers to cover the gap by raising prices on others.

There are many criticisms of mandatory health insurance. In the US, one criticism is that the government should not or does not have the power to force people to buy anything. Others say the law would be too difficult to enforce. Affordability, penalties, and what plans would qualify are also issues.

In the past, individual states in the US have made mandatory health insurance part of state law. Hawaii state law has required that employers provide health insurance for full-time workers since 1974. The effectiveness of the Hawaii law has been a matter of debate. In 2009, as part of Massachusetts health care reform, that state required that all citizens obtain health insurance. Those who don't may face penalties unless they can't afford it. Mandatory health insurance is less discussed in other Western countries where the government provides basic health care for everyone.