Health Care Reform

Frequently Asked Questions

Requiring individuals to buy insurance

Why is there a mandate that everyone buy health insurance?
An effective individual mandate is critical so that everyone – young, healthy people, and older, sicker individuals – has health care.  The law also requires that in 2014 insurers must accept everyone for coverage regardless of their health. This provision will increase the number of people who have insurance, and spread the risk of insuring healthy people who use less health care, with unhealthy people who use more health care and are more expensive to insure.  However, there is one big problem: the penalty for the mandate is very weak, $95 per person beginning in 2014.  With penalties this low, it’s likely that people will pay the penalty because that’s cheaper than buying insurance.  In fact, independent research shows that to be effective the annual penalty must be 75% of the average cost of an individual insurance premium or $3,800.