“It became pretty clear that, if you want a [health care] market to work, you need a mandate.”

June 17th, 2012

States that have tried to guarantee healthcare for all, while preventing insurers from denying coverage, have all failed without a mandate:

In 1993, Washington state passed a law guaranteeing all residents access to private health-care insurance, regardless of their health, and requiring them to purchase coverage.

The state legislature, however, repealed that last provision two years later. With the guaranteed-access provisions still standing, the state saw premiums rise and enrollment drop, as residents purchased coverage only when they needed it. Health insurers fled the state and, by 1999, it was impossible to buy an individual plan in Washington — no company was selling.

Insurers shrugged.

Washington is among a handful of states that have pursued universal access to health insurance. The challenges they have faced could give some clues about the federal overhaul’s fate should the individual mandate get struck down.

“There are seven states that tried this in the mid-1990s and, in every case, it was a disaster,” said MIT health-care economist Jonathan Gruber, who worked on Massachusetts’ health-insurance law and the Affordable Care Act. “It became pretty clear that, if you want a market to work, you need a mandate.”

I suppose this goes against severing the mandate from the guaranteed issue and community rating provisions.