Commentary

Insurance Mandates Are No Free Lunch

So now the people who gave us the IRS and the post office are going to give us health-care quality.

It wasn’t so very long ago that politicians told us managed care was going to be the savior of the health-care system. President Clinton even designed a health-care plan that would have forced everyone to join an HMO. The reason was simple: Managed-care programs were supposed to cost less.

Now those politicians are shocked — shocked! — to discover that one way managed care saves money is by reducing the services it offers and putting restrictions on the types of providers patients can see.

The president’s Advisory committee on Consumer Protection and Quality in the Health Care Industry wants to force insurance to provide those benefits.

If Washington could learn just one lesson, it should be this: There is no such thing as a free lunch. Every time the government imposes a new mandate on insurance, someone has to pay for it.

That someone is going to be you and me.


If the government would just leave insurance alone, the marketplace will force insurers to adapt to consumer demands for quality.


Insurance premiums had been relatively stable for the past few years. But last year Congress decided to meddle in the market, passing a variety of new mandates: guaranteed issue and portability, increased parity for mental illness, 48-hour maternity stays. And this year insurance premiums are expected to rise by at least 5%.

It’s no coincidence. We are paying the price for Congress’ “compassion.”

Rising insurance costs will mean that many small businesses will be forced to drop their insurance coverage altogether. Many young and healthy people will will also choose not to pay the higher premiums.

The result will be many more uninsured Americans.

If the government would just leave insurance alone, the marketplace will force insurers to adapt to consumer demands for quality. Already, the most restrictive forms of managed care are fading from the scene, replaced by plans that offer more consumer choices. That is what happens with all other goods and services.

Can you imagine a national commission trying to determine what constitutes a quality automobile or hamburger?

Consumers operating in a free market are best able to determine health-care quality. Let’s keep the bureaucrats out of it.

Michael Tanner is director of health and welfare studies at the Cato Institute.