Argument: Insurance mandates force citizens to buy special-interest benefits
Paul Hsieh. "Health care in Massachusetts: a warning for America". Christian Science Monitor. September 30, 2009: "Under any system of mandatory insurance, the government must necessarily define what constitutes acceptable insurance. In Massachusetts, this has created a giant magnet for special interest groups seeking to have their own pet benefits included in the required package. Massachusetts residents are thus forced to purchase benefits they may neither need nor want, such as in vitro fertilization, chiropractor services, and autism treatment – raising insurance costs for everyone to reward a few with sufficient political pull.
Although similar problems exist in other states, Massachusetts' system of mandatory insurance delivers the entire state population to the special interests. Since 2006, providers have successfully lobbied to include 16 new benefits in the mandatory package (including lay midwives, orthotics, and drug-abuse treatment), and the state legislature is considering 70 more.
The Massachusetts plan thus violates the individual's right to spend his own money according to his best judgment for his own benefit. Instead, individuals are forced to choose from a limited set of insurance plans on terms set by lobbyists and bureaucrats, rather than those based on a rational assessment of individual needs."
Glen Whitman. "Hazards of the Individual Health Care Mandate." CATO. September/October 2007: "Defining the Minimum Benefits Package
If you're going to mandate something, you have to define it. Under an individual mandate, legislators and bureaucrats will need to specify a minimum benefits package that a policy must cover in order to qualify. It's not plausible to believe this package can be defined in an apolitical way. Each medical specialty, from oncology to acupuncture, will pressure the legislature to include their services in the package. And as the benefits package grows, so will the premiums.
Limiting the mandate's scope with vacuous phrases like "basic health care products and services" will not solve the problem, because what is basic to some is crucial to others. Does contraception constitute basic health care? How about psychotherapy? Dental care? Chiropractic? The phrase "medically necessary" is just as problematic, because there is no objective definition of necessity. And even if there were, it wouldn't matter, because the content of the law will be determined by the legislative process. The "basic" package might initially be minimal, but over time it will succumb to the same special-interest lobbying that affects every other area of public policy. If psychotherapy is not initially included in the package, eventually it will be, once the psychotherapists' lobby has its way. And likewise for contraception, dental care, chiropractic, acupuncture, in vitro fertilization, hair transplants, ad infinitum.
This is not mere speculation. Even now, every state in the union has a list of mandated benefits that any health insurance policy must cover. Mandated benefits have included all of the services listed above — yes, even hair transplants in some states. All states together have created nearly 1900 mandated benefits. Given that medical interest groups have found it worth their time and money to lobby 50 state legislatures for laws affecting only voluntarily purchased insurance policies, mandatory insurance will only exacerbate the problem. If the benefits package is established at the federal level, the incentive to lobby will be that much greater.
Medicare and Medicaid provide further evidence. Given the massive funds at stake in those programs, it should come as no surprise that lobbying has affected the list of covered benefits. A public outcry prevented Viagra from being covered by Medicare and Medicaid, but other drugs and services have not attracted that kind of scrutiny. In 2004, after heavy lobbying by pharmaceutical companies that make antiobesity drugs, Medicare reclassified obesity as an illness (or rather, removed language saying it was not an illness), thereby clearing the way for coverage of obesity treatments including diet pills, weight-loss programs, and bariatric surgery. Although by law Medicare can pay only for "medically necessary" services, the obesity story aptly demonstrates the subjective and ultimately political meaning of that term.
Mandated benefits drive up insurance premiums; after all, insurance companies can't make more payouts without higher revenues. Existing mandates have increased premiums by an estimated 20 to 50 percent, depending on the state. There is every reason to believe the same process will affect the minimum benefits package under an individual mandate. As a result, even more people will find themselves unable to buy insurance and decide not to comply. Others will buy the insurance, but only by relying on public subsidies. A health policy intended to rein in free riding and cost shifting will tend to encourage more of the same."
Stuart M. Butler. "Defining the 'Hardship Waiver'". New York Times Room for Debate. June 4, 2009: "Also, should families be mandated to buy whatever Congress decides, after being pressured from health lobbyists to add everything they can think of into a mandatory “basic” plan? I don’t think so! So let’s discuss what I should be responsible for and who decides that question before embracing any mandate."
Paul Hsieh. "Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America". The Objective Standard. Fall 2008: "Costs have risen for individuals because, under this plan, as under any mandatory insurance scheme, the government must define what constitutes an acceptable insurance policy. As a result, special interest groups have been given both the incentive and the means to lobby politicians to include their pet benefits as part of the government-approved plan. Consequently, the state government requires all patients to purchase “benefits” that are useless to many of them—benefits they would never voluntarily choose to purchase in a free market. For example, Massachusetts currently requires insurance plans to include forty-three mandatory benefits, including in vitro fertilization, blood lead poisoning treatment, and chiropractor services—whether or not customers want them. Residents must purchase alcoholism therapy benefits, even if they are teetotalers. These mandated benefits have raised the costs of health insurance in Massachusetts by 23 to 56 percent."