What is a health insurance mandate?

Governments in many countries require their citizens to have health insurance so that they are protected from the potentially high costs associated with ill-health. The law therefore contains an order (or mandate) requiring them to be insured. The best insurance pools are those with the largest number of people in them and in particular a mix of healthy as well as unhealthy people. The mandate ensures everyone is in the insurance pool.

The U.S. government recently came close to inserting a mandate for all citizens to have insurance but instead gave the uninsured the option of paying a fine for being uninsured. This, it is argued, is necessary because insurance companies will soon no longer be able to ask questions about health status and will have to insure all applicants. Without the fine, healthy people would be tempted to stay out of an insurance pool until they became sick and their costs would therefore be an unfair burden on other people in the pool who have always paid in. The government (thru Medicare and Medicaid), private insurer premium payers, and other health care system uses all pay more when the uninsured fail to pay for the care the receive. The fine therefore gives an incentive for everyone to be insured without it having to be mandated.

The press and politicians often refer to an "individual mandate", but this is really a short hand phrase for the penalty levied on the uninsured. The only mandates in the law are coverage mandates imposed on insurance companies which will no longer be able to charge sick people more than healthy one and which will not be able to set caps on coverage or force sharing of costs for essential items such as health screenings.