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Health Insurance Cover

The issue of whether Americans should be mandated to buy health
insurance has remained controversial in the last few years. More and more
debated are being raised from different scholars on the real impact such a
regulation would imply to the overall public. Some scholars support the
initiative arguing that such a step would improve the inclusive health of all
Americans while another group is against the initiative. According to those
arguing against the initiative, mandating people to buy health insurance covers
would only lead to certain detrimental effects such as increased premiums.
Hence this paper will seek to weigh the various viewpoints presented in a bid
to analyze and provide feedback on the most rational decision.

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Time and time again the government has found itself spending a large
amount of its health budget on uncompensated care. According to the Urban
Institute, the government spent almost $56 billion on uncompensated care in
2008 alone. Karen Davenport is a big supporter of the idea of everyone being
mandated to purchase individual health covers. According to her, purchasing
health cover should be taken as individual responsibility. Taking care of
oneself by ensuring you are fully covered for any catastrophic occurrence
should be a personal responsibility. This will additionally reduce the free
rider effect where by some people enjoy health care at the expense of others.
This is because most people wait till they are sick to buy these health covers.
Since insurance sellers will always agree to sell, they will be forced to
increase premiums just to remain afloat.

However, various scholars have argued that mandating everyone to buy
health covers would lead to increased premiums nonetheless. However, Davenport
argues that the government will definitely urge insurance providers to reduce
their premiums in order to allow them to be affordable and accessible to
everyone even the poor. Additionally, where everyone purchases insurance costs
will be shared given that those who pay lesser premiums will also require more
treatment at some point and vice versa. Hence cheap may not always remain cheap
for the insurer. In her viewpoint, if it were to be made mandatory to buy
individual health covers, access to healthcare would improve as is the case in
Massachusetts.

On the other hand, the argument against the adoption of such a regulation
has continued to persist over the years. Most scholars have argued that such a
requirement was tantamount to federal interference in people’s private matters.
According to them, people should not be forced into purchasing any private good
or services. Hence they should be allowed to make their own private decisions
on whether to purchase health cover or absorb the financial risks involved.
Michael Cannon, a strong advocate against the requirement, has further argued
that it would only lead to higher premiums. Households would be necessitated to
buy more premiums just to meet the set standards. Furthermore, the Urban
Institute showed that mandating everyone to buy insurance covers would increase
premiums by around 1.7 percent.

In addition to this, Victoria Payne and Michael Cannon calculated that
individuals could save up to $3,000 annually. This would be achieved by
negating to take cover, paying the penalties and waiting to be sick to buy a
health cover. In addition to premiums rates increasing, it promotes
irresponsibility among Americans. This is because most people would engage I
otherwise risky behaviors just because they have health covers compared to when
they are not covered. This would further increase the amount of money that will
be used as a consequence of irresponsibility. Hence, forcing other people to
bear extra costs because of one’s irresponsibility does not amount to personal
responsibility. Hence the mandate cannot be considered a free market approach
and thus uneconomical.

Both Cannon and Davenport have raised rational arguments which have been
directed at supporting their points of view. Taken from each of their points of
view their remarks can be considered highly pragmatic. However, Cannon makes a
rather compelling argument given that the American economy is firstly a free
market. Furthermore, trying to eliminate the free rider effect by forcing
people to buy health cover would only lead to increased federal costs compared
to the benefits to be gained. This because insurance firms will know it is
mandatory to buy health cover leading to increased premiums. Additionally, it
will lead to individuals engaging in rather compromising situations on the
basis that they are covered. This will definitely increase the number of costs
that will be used to cover the increase in treatment cases.

The American economy should be allowed to operate as a free market free
from any federal interference. This will ensure that health premiums remain
affordable and accessible to the individual owing to the little demand compared
to when everyone is mandated to buy health cover. Hence the federal government
should not adopt such a mandate that will force its people to purchase private
goods and services. Everyone should be allowed to make the personal decision on
whether to buy health insurance cover or accept the financial risks that arise
from not buying a health cover.

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