Individual Mandate Costs Explained

Margaret Dick Tocknell, 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.

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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