Miller-McCune Online | A Prognosis on Mandates and Guarantees

. . . Those who support individual mandates are by no means dominated by the insurance industry. Advocates include The Brookings Institution, The Urban Institute and The New America Foundation, where health care economist Len Nichols says major reform doesn't have to start with a mandate, but it needs to be included pretty early on.

Even more important, he adds: America's health care system needs to be more rational.

"If you impose guaranteed issue without a mandate, you put insurers at risk for adverse selection," Nichols said.

Young and healthy people tend to leave an insurance pool first, Nichols said. And it's those premium dollars that typically pay for the sick. "Insurers have to protect themselves. Protecting themselves from that risk is how they develop underwriting techniques," he said. "It's why they exclude people completely." . . .

In 2006, Massachusetts became the first and only state to impose an individual health insurance mandate. It came with an employer mandate, government subsidies and other cost-saving measures. Even though they made a few mistakes, Nichols said more attention should be paid on what Massachusetts got right. "They got all the big things right," he said, "starting with agreeing to cover everyone." . . .

In the simplest terms, Nichols and other reformers say, we must buy smarter by instituting incentives that emphasize prevention and medical treatments with the highest value.

"We won't say ‘no,' to providing care," Nichols said. "We will just make the co-pay higher. We have to stop collectively financing low-value care. I don't think that's rationing. Rationing is denying known efficacious care. We ration today by income. Being rational doesn't mean rationing. At the same time, we have to work really hard at earning trust."