||The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (June 2012)|
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, and thus within Congress' tax and spend powers.
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."
In 2012, Eliot Spitzer credited what he called "spectacular historical reporting by Professor Einer Elhauge," who is employed by the campaign to re-elect President Obama, for finding 18th century legislation that Spitzer and Elhauge called individual mandates. 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.
An Act for the relief of sick and disabled seamen, signed into law by President John Adams in 1798, required employers of seamen to pay to the federal Treasury 20 cents per seaman per month, and authorized the President to use the money to pay for "the temporary relief and maintenance of sick or disabled seamen," and to build hospitals to accommodate sick and disabled seamen. The Act authorized the employer to deduct the monies from the seamen's wages. (See Workers' compensation and Social Security Disability Insurance.) Others have called the 1798 statute a tax like Medicare and said it cannot be called an individual mandate, because it does not require anyone to purchase anything.
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.
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.
- Kendall, Brent (August 13, 2011). "Health Overhaul Is Dealt Setback". The Wall Street Journal.
- "Virginia judge rules health care mandate unconstitutional". CNN. December 13, 2010.
- Seelye, Katharine Q. (September 27, 2009). "Court challenge seen in health insurance mandate". The San Francisco Chronicle.
- "Individual Mandate Under ACA". Congressional Research Service. March 6, 2014.
- Elhauge, Einer. "If Health Insurance Mandates Are Unconstitutional, Why Did the Founding Fathers Back Them?". The New Republic. Elhauge, Einer. "A Response to Critics on the Founding Fathers and Health Insurance Mandates". The New Republic. Elhauge, Einer. "A Further Response to Critics on the Founding Fathers and Insurance Mandates". The New Republic.
- Conason, Joe (2010-03-25). "So George Washington was a socialist, too! If the individual mandate is unconstitutional, how could our first president require every citizen to buy a gun?". Salon.com.
- Tanner, Michael (2006). Individual Mandates for Health Insurance: Slippery Slope to National Health Care. Cato Institute.