I’m surprised that the Senate and the Congress didn’t seem to have studied how other countries solve problems that come with “health mandate” or just mandatory health insurance in general. I wonder if current situation is simply a holdover from the time where original plans contained a public option, or a non-profit alternative, where citizens wouldn’t be required to buy a private insurance.
The problem is obvious — if someone notices that fine is less than annual cost of private insurance, that person would rationally not buy the insurance. What’s the point? If it’s cheaper to pay the fine, and then pay from your own pocket for some small health problems, why shell out big bucks?
And if something unexpected and big happens, off you go to the insurance company, and they can’t refuse you for “pre-existing condition”, so everything’s peachy. Except for the insurance company which, despite being huge, wealthy, perhaps evil, would have to pay out more, than it can collect in premiums (because there’s a limit on how much they could charge someone with pre-existing condition)
So, how to solve this problem? Force an annual review of fines and link them to the average cost of insurance? That would bring costs way-way up, as they’d keep on creeping in upward direction with nothing to contain them.
More interesting solution would be similar to what is done in Germany — you can refuse to purchase the insurance, but then for next 5 years you can’t run back if something back happens. So, offer people opt-out, with 5 year ban on “can’t deny pre-existing condition”. Those, who think about the future, would carry insurance. Those, who don’t want to, would still be able to bring a financial ruin onto themselves. Problem solved.
Of course some people may say it’s unethical. But the problem is not ethics, but choice. Ethics is foregone as soon as medical service becomes a for-profit business. If you are driven by money, you inevitably can get into situation where the choice is “follow shareholder’s instructions” or “do the ethical thing”. Just look at all the drug patents. If manufacturers were walking the purely ethical road, as soon as new drug is developed, it’d be sold at cost. Which would make Wall Street extremely unhappy…