Most centrist health policy wonks argue that we need universal mandates. If we want to have low cost, comprehensive health insurance when we develop health problems, we need to pay for it now. Those of us who have had some experience with ill health have taken this lesson to heart and continue to pay premiums or keep the job that gives us insurance. As for the rest of us: Well we can always start tomorrow. Did you see? Restoration Hardware is having a sale!

People who are expensive to insure follow through on their good intentions. People who are young and cheap to insure tend not to follow through, even if they can. As a result, comprehensive health insurance is anything but affordable. The only effective way to prevent this sort of adverse selection in health insurance markets is to mandate that everyone buy health insurance. This will lower the average cost of providing health insurance and eliminate the need to screen applicants. It is, in wonkese, a necessary condition for a viable health policy reform.

It is not, however, a sufficient condition. If health insurance companies do not respond by eliminating screening and lowering prices. Wonks Anonymous believes that they will not. 

As noted in previous posts in this blog, health insurance companies have recently begun to market a new type of policy: High Deductible Health Plans. These policies require large out of pocket expenditures before the health insurance provider pays for care. Because of this they are cheaper to administer and they have the further advantage of being extremely unattractive to people with health problems.

The trouble is that even is we mandate the purchase of health insurance, competing insurers will still be able to increase their profit by attracting healthy customers and avoiding sick people. They will use every means available to do this, including lowering the quality of their insurance offerings to move the less healthy to their competitors. Adverse selection will drive up the prices of comprehensive insurance and may eliminate comprehensive plans altogether.

In the final analysis mandating the purchase of health insurance will still produce an insurance marketplace much like the one that we have today: Comprehensive health insurance will still be prohibitively expensive for most people. Healthy young people will still choose to purchase High Deductible Plans and pay very little to finance health care. At the same time most of the population will have to settle for these same High Deductible Plans because they cannot afford comprehensive insurance. When people get sick these catastrophic health plans will lead to personal financial catastrophes only slightly less dire than those that they would face without insurance.

One other thing. It will no longer be just the health insurance providers fault. The government and the reformers will also be to blame for the disaster. Wonks Anonymous wants comprehensive universal health coverage as much as the next person. He believes that such coverage will have to be mandatory. He does not, however, trust the current health insurance marketplace to deliver such coverage. He fears the political consequences for reformers if it does not.