Individual Mandate Costs Explained

Margaret Dick Tocknell, for HealthLeaders Media , April 4, 2012

The scene outside the Supreme Court last week was a lively and peaceful exercise in civil expression. The scene inside the courtroom was lively in its own right. Consider Justice Antonin Scalia's line of reasoning likening healthcare to food in what has come to be called the 'broccoli mandate.'


It's easy to get distracted by soundbites surrounding complex topics. But while the nation's attention was largely on the spectacle, healthcare industry researchers were hard at work assessing the potential effect of the individual mandate on health insurance and premiums.

Two studies show that the individual mandate and penalties for noncompliance would directly affect only a small number of Americans, that government subsidies will enable most of the affected to cover their health insurance costs, and that without the mandate, government spending will actually increase by $10 billion.

This isn't information the Supreme Court justices will consider as they work toward a decision, but from a dollar and cents standpoint, these studies seem to make the case for the economic value of the individual mandate.

The studies also point to a significant problem for the individual mandate: True analysis of its value involves a dizzying array of statistics. In the court of public opinion, it's much easier to object to the individual mandate with a simple soundbite about the 'government takeover' of healthcare.  Here are two scenarios and supporting stats reflecting the analyses by the Urban Institute and RAND.

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4 comments on "Individual Mandate Costs Explained"

Chris 2 (4/5/2012 at 12:00 PM)
According to Kaiser, the US spends (Federal State and Local) about at 2.6 Trillion dollars in health costs in 2010. So with out the Individual Mandate, the spending will increase 10 Billion dollars, which is less than a half percent.

Kelly (4/4/2012 at 2:08 PM)
Exactly. The decion isn'trydrag about if its a good idea. By the way, where does the government get the money to pay the subsidies and all those folks flocking to Medicaid? Funny how she glossed right over that.

Todd (4/4/2012 at 12:43 PM)
Everyone's opinion of the individual mandate and whether or not it is good social policy has no bearing on what the supreme court must decide. The court must rule on whether the law is constitutional or not.




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