Saying Goodbye to the Mandate

Last month’s Supreme Court decision to uphold nearly all of the Affordable Care Act is a big win for Americans. Yet even though they found that the individual mandate is constitutional, it might be time for health reform advocates to part ways with it, at least in words. More than any other part of the healthcare reform law, the provision requiring individuals to either purchase health insurance if they can afford to do so or to pay extra on their taxes has spurred the most controversy and opposition. As seen below, a poll by the Kaiser Family Foundation found the “individual mandate/penalty” to be the least popular aspect of the law.

In a polarized political world it’s no wonder that critics have focused much of their attention on this provision. It also makes sense that supporters have refrained from relabeling it a “tax” or “penalty”. Interestingly, the word “mandate” never appears in the bill itself. Writing for the majority in last month’s decision, Chief Justice John Roberts references what the Affordable Care Act actually calls it—a “shared opportunity payment”.

So is it a tax? A penalty? A mandate? A shared opportunity payment? The truth is that, regardless of what it’s called, it functions the same way: those who can afford to buy insurance but don’t will pay an extra fee along with their taxes.

Certainly no one likes the idea of paying taxes or penalties or being mandated to do something. But these labels distract from how the individual mandate works. Like any insurance, health insurance needs enough people to group together so that everyone pays a reasonable amount in premiums. People who don’t carry insurance but wind up with a medical emergency often face such high costs that they can’t pay them. That forces everyone else to pick up their bills in the form of higher medical costs, local taxes, and insurance premiums.

Many people can’t afford to buy insurance, something the healthcare reform bill takes into account by offering subsidies and by expanding the Medicaid program. For the rest of us, the individual mandate is a protection against having to foot the bill of people who choose not to buy insurance.

While “shared opportunity payment” and “closing the health insurance free-rider loophole” don’t have quite the ring of “individual mandate,” they’re in many ways more accurate. Personally, when possible I think I’ll be calling it the “personal responsibility payment” to emphasize that we all have a role to play in making the healthcare system work.

Marcus Denton is a health policy intern at the Center for Public Policy Priorities in Austin, Texas.