Alec MacGillis has a good piece in the Post on the underdiscussed question of what actually happens if you mandate that everyone gets health insurance. After all, we have an “individual mandate” that that teenagers must abstain from beer, but that doesn’t mean you never see drunk teenagers. If you want people to actually comply with a government mandate, and if you want people to take advantage of subsidies designed to help them comply with the mandate, then it’s important to think about other aspects of policy design:
As the behavioral economists see it, compliance will depend not only on the penalties and cost of coverage, but also on the ease of signing up for coverage and whether people can be persuaded that it is a widely accepted social norm. They point to the large number of eligible people who fail to take advantage of Medicaid, food stamps and Pell grants as a sign that perceived inconvenience can keep people from taking steps in their economic interest. By contrast, the Medicare drug benefit program has achieved high enrollment partly because low-income Medicare recipients did not need to apply for subsidies if they already qualified for Medicaid.
Gillis points out that car insurance is generally mandatory, but “The rates of people buying car insurance, for example, vary among states and do not correlate directly with the size of penalties for going without insurance.” In some ways more directly relevant to the health care debate is that in Switzerland, which is in some important respects the model for Obama-care, car insurance rates are far higher than they are in the United States.