Individual mandate

An individual mandate is a requirement by law that certain persons purchase or otherwise obtain a good or service.

Health insurance in the US

In the United States, the Patient Protection and Affordable Care Act signed in 2010 imposes a health insurance mandate to take effect in 2014. In 2010, a number of states joined litigation in federal court arguing that Congress did not have the power to pass this law and that power to "regulate" commerce does not include an affirmative power to compel commerce by penalizing inaction. On June 28, 2012, the Supreme Court of the United States upheld the health insurance mandate as a valid tax, in the case of National Federation of Independent Business v. Sebelius and thus within Congress' taxing power, but not its power to regulate commerce.

In 2011, two of four federal appellate courts upheld the individual mandate; a third declared it unconstitutional, and a fourth said the federal Anti-Injunction Act prevents the issue from being decided until taxpayers begin paying penalties in 2015. In 1994, the Congressional Budget Office issued a report describing an individual mandate to buy insurance as "an unprecedented form of federal action... The government has never required people to buy any good or service as a condition of lawful residence in the United States."

On August 30, 2013, final regulations were published in the Federal Register (78 FR 53646), with minor corrections published December 26, 2013 (78 FR 78256).

Historical example

The Militia Acts of 1792, based on the Constitution's militia clause (in addition to its affirmative authorization to raise an army and a navy), would have required every "free able-bodied white male citizen" between the ages of 18 and 45, with a few occupational exceptions, to "provide himself" a weapon and ammunition. (See Conscription.) The Militia Acts had been reported in 2010 by Joe Conason, but were never federally enforced, so their constitutionality was never litigated.

Economics

Given that insurance companies are restricted by law in their ability to alter insurance rates based on pre-existing conditions, they must set their rates to at least cover their costs. This means that the rates on healthier individuals will be greater than what they would pay otherwise, while reducing the rates on less healthy individuals (e.g., those with pre-existing conditions). The healthier individuals (e.g. the young) will be under economic pressure to opt out of the system, which will cause the insurance companies to raise rates on those remaining insured in order to cover the lost revenue. This will further increase the pressure on healther individuals to opt out of buying health insurance, which will further increase rates, until the market collapses. Mandated insurance is intended to prevent this downward spiral.

Other countries

In Australia all States and Territories now have legislation that requires home and building owners to install smoke alarms. Thus, where these have not been installed, for example, in older homes and buildings, owners must procure or purchase, and install, smoke alarms. A further example of legal compulsion to buy a good or service in Australia, India, and other countries is compulsory third-party personal injury insurance in relation to the ownership of a motor vehicle.

See also

• Health insurance mandate
• Employer mandate
• Mandate (criminal law)