The evidence given against mandates appears misleading. Certainly if a state issues a must-insure mandate, without a must-be-insured mandate, the financial catastrophes described are inevitable. A must-insure mandate simply invites everyone (or at least those most healthy or those who imagine themselves to be healthy) to wait until they are sick before buying insurance – a recipe for financial disaster. Meanwhile those who have medical conditions will of course buy in.
On the other hand, the existing individual market makes it literally impossible for those with all but the slightest medical risk to buy insurance unless they are employed by a medium sized or above company. For example, at one time, Blue Cross of Arizona would deny coverage to anyone who had ever taken Prozac!
Many people are one job loss away from loss of medical coverage – not for lack of ability to pay, but because the natural dynamic of the private insurance market causes the companies to offer insurance only to those not yet ill. Many are kept from retiring, or becoming entrepreneurs, or joining small companies by the same perverse system. Furthermore, those without insurance end up paying the retail price for care, while the insurance companies pay a small percentage of that. Put another way, individuals are gouged in pricing by the providers. I saw one case where the retail price was $50,000 and the insurance price was $14,000.
The individual health insurance market in the US is completely broken.
Your proposal to create a risk pool spread across the entire industry at least provide universal availability of coverage. However, rather than spreading the cost across all citizens, it spreads it only across those who choose to be insured – again letting the young and/or risk-prone avoid contributing to the pool. This raises the cost to the insured (or their employers), reducing the incentive to be insured and creating the sort of spiral we have already seen, where the insured pools get smaller as the costs go up, and the costs go up because the pools are smaller.
