Sherry Glied has a nice summary of the issues involved in the Democratic primary debate in the NEJM. Which is better: individual mandates or coaxing people to buy insurance with subsidies? The problem with subsides:
- To get the job done, the subsidies might well exceed the cost of the coverage itself.
- Subsidies will inevitably crowd out private spending, shifting to the taxpayers burdens people would otherwise shoulder on their own.
But mandates are no panacea either because of three risks:
- First risk: a mandate is a tax and if government subsidies are insufficient, it will become a very regressive tax.
- A second risk: special interests will bloat the required benefit package.
- Third risk: to be effective there must be continuous coverage and enforcing such a mandate may require a degree of intrusiveness and bureaucracy that many will find unpalatable.