Individual health insurance: Are mandates ready for prime time?

Mandatory health insurance coverage is being debated by presidential candidates. And Massachusetts is trying out this approach. But is requiring people to have coverage a workable component of health system reform?

By Doug Trapp, AMNews staff. June 2, 2008.

Last fall, Laura Allen didn't think Massachusetts' law requiring everyone to have health insurance would affect her life. She had a customer service job at a rubber stamp company that provided coverage.

But then the 42-year-old Easton, Mass., resident was told she would be laid off before the end of the year. And the new state law imposed a $200 tax penalty on anyone uninsured on Dec. 31, 2007.

The prospect of being unemployed and uninsured was stressful for Allen. She couldn't afford the $1,400 monthly COBRA premiums for herself and her husband. So she called the Connector Authority -- the body managing the state's comprehensive health reform program -- several times for help enrolling in health insurance. She couldn't get through because the Connector phone lines were overwhelmed by residents trying to do the same thing. "It was frustrating," said Allen.

Eventually, things worked out for Allen. On Nov. 5, 2007, she began work as a receptionist at an electrical supply company that would offer health insurance in two months -- just after the deadline. Her company let her enroll five days early so she could avoid the tax penalty. A Commonwealth Connector spokesman said Allen could have applied for a hardship exemption.

Allen, like many others in Massachusetts, found herself on the front line of an experiment in personal responsibility -- the individual health insurance mandate.

Since the Massachusetts effort began in 2006, many lawmakers and policy experts have embraced individual mandates as an integral part of health system reform. Several states -- most notably California -- have considered legislation with a Massachusetts-style insurance requirement. So far none has adopted the measures. Some states are considering mandates for higher-income residents only, which parallels AMA policy.