The truth about mandatory health insurance

The rationale for a federal mandate that forces every American to buy health insurance is based on myths, not facts, says Betsy McCaughey, a former lieutenant governor of New York and an adjunct senior fellow at the Hudson Institute.

The first myth is that it's fair to make everyone pay the same price for health insurance. It is not. For young people who rarely use health services, this is a rip-off. If people in their 20s paid attention to politics and voted, politicians wouldn't dare try this, says McCaughey:

  • According to the latest Census data, 56 per cent of the uninsured are adults aged 18-34.
  • Forcing them to be a part of a same-price-for-everyone insurance pool will likely bring down premiums because these young people generally need minimal health care ($1,500 a year, on average, according to a Commonwealth Fund study).

    In most states, (but not New York and Vermont), young adults who buy health insurance are charged premiums that reflect their low medical needs; for example:
  • A 25-year-old man can buy a $1,000 deductible policy for a quarter to a third of what a 55-year-old man has to pay.
  • In Manchester, N.H., a 25-year-old man pays $156 per month, while a 55-year-old pays $542 for the same policy, according to

    Both the Clinton proposal and the bipartisan congressional proposal prohibit insurers from giving such price breaks to the young. Their mandates would force the young to subsidise the heath tab for the middle-aged generation. This subsidy would come on top of the payroll tax younger people already pay to support today's Medicare recipients. This is contrary to a fundamental American principle. This nation has always believed in making life better for its children, not exploiting them, says McCaughey.

    Source: Betsy McCaughey, The Truth About Mandatory Health Insurance, Wall Street Journal, January 4, 2008.

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    For more on Health Issues:

    FMF Policy Bulletin/ 08 January 2008

    SA Note by Eustace Davie:
    SA policy tends in the same direction as that being proposed in the US, to provide health care to the older patient at lower cost by burdening the young. Medical schemes should spread the cost of health care across patients according to their age groups and family cover should incorporate the same principles. Loading for pre-existing conditions is legitimate and calculation of the contributions of such members should be based on sound actuarial principles. All governments do when they interfere with the work of the actuaries is to impose increased risk on medical scheme members and reduce the benefits available to people of generally good health. The best real protection for medical scheme members is unimpeded competition between a large number and variety of competing medical schemes.
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