What Does the Individual Mandate Have to Do With Free Riders?


Supporters of mandatory health insurance have argued that the purchase requirement is necessary to promote "individual responsibility" and prevent "free riders"—individuals who show up at emergency rooms, get care, and don't pay. This is part of the argument that Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius have used to make the case for ObamaCare's mandate. It's also the argument made by Mitt Romney in support of the mandate he signed into law in Massachusetts. But as The Examiner's Philip Klein points out, there's a strong argument that that's not really what the individual mandate is about:

In reality, the mandate has always been about forcing healthy people into the insurance pool, to offset the distortion in the market created by the related provision requiring insurers to cover those with pre-existing conditions.

Tuesday's oral arguments on the constitutionality of the mandate illuminated this better than ever before.

Mike Carvin, who represented the National Federation of Independent Business before the court, explained that the uninsured and those who show up at hospitals without paying are different populations.

"It is clear that the failure to buy health insurance doesn't affect anyone," Carvin said. "Defaulting on your payments to your health care provider does. Congress chose, for whatever reason, not to regulate the harmful activity of defaulting on your health care provider."

As Klein points out later, the law's essential benefits requirements make it even tougher to make the case that the mandate is simply a response to free riding. Those requirements do not merely force individuals to purchase insurance covering catastrophic care expenses, but also set guidelines, to be fleshed out by the states, as to what sorts of benefits must also be covered. 

It's been clear for a while that the law is, at minimum, designed to do quite a bit more than zero out the free-riding problem. Estimates used by the administration suggest that national uncompensated care costs ran about $43 billion in 2008. But the law is set to spend about $200 billion or more each year on insurance subsidies by 2017.