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Friday, August 21, 2009

Small Biz Health Care Daily: The Individual Mandate Problem

The health care agenda being pushed by President Obama and congressional leaders not only includes a “pay or play” mandate on businesses, but also a mandate on individuals – including the self-employed – to either have or purchase health care insurance. What wrong with that?

Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council, points out:

“An individual mandate creates a variety of costs and problems. For example, government would have to impose assorted regulations and mandates that cover plan design, costs and allowable premiums; mandate participation by individuals, insurers and health care providers; provide subsidies and taxes to pay for such subsidies; and impose penalties for noncompliance. The predictable result is that costs explode. That certainly has been the case in Massachusetts. The state imposed a massive government-led health care system three years ago featuring an individual mandate. Costs skyrocketed. Last year, new taxes and fees were imposed. But the program still faces massive shortfalls in coming years.”


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