Janet Trautwein: Why We Need a Strong Individual Mandate - WSJ.com: "After the House passed a sweeping health-care bill over the weekend, President Barack Obama called on the Senate to 'take the baton and bring this effort to the finish line.'
He's right. Lawmakers still have a long way to go to ensure that the bill that lands on the president's desk fixes our system's shortcomings.
One of the key issues to address is the individual mandate, which would require individuals to purchase health insurance. If the Senate fails to adopt a strong mandate as the House did, health-care costs will increase at a faster rate than they have in the past and as a result, vast numbers of Americans will remain uninsured.
Why will costs increase? Because in addition to the individual mandate, two provisions that have become part of every reform bill advancing in Congress require insurers to sell policies to anyone who wants it but without charging premiums based on a person's health status. These provisions are aimed at making insurance affordable for anyone with chronic or other costly medical conditions.
The problem is that these provisions can make insurance a lot more expensive. Insurance is fundamentally a mechanism for spreading risk. If only high-risk people sign up, insurance will become very expensive for everyone who buys a policy. However, if a lot of low-risk people also pay into the system, there will be more money to take care of those who need expensive services than if fewer low-risk people pay in. If everyone carries insurance, in short, premiums will be a lot lower for everyone."
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