The Effectiveness (or Lack Thereof) of the Individual Mandate

Abstract

ABSTRACT

            There are two main objectives of the study: 1) to determine the effect of the individual mandate on various aspects of healthcare in the United States from 2010 to 2019, using insurance coverage, insurance premium, overall welfare, the crowding out of private insurance, overall healthcare spending, government spending, and healthcare quality as indicators; and  2) to identify the effect of the individual mandate of the ACA on different income groups in the United States.  The results showed that, in terms of coverage rates, most studies suggest that the mandate increases coverage rates, although one study suggests there is no effect of the mandate on coverage rates. Evidence also points out that the individual mandate can decrease insurance premiums, increase welfare, and prevent a crowding out effect.  However, the results also revealed that the mandate can increase overall healthcare spending, has an ambiguous effect on government spending, and has no effect on the healthcare quality in the United States. Overall, the benefits of an individual mandate appear to outweigh their costs.