The economic question at the core of the individual mandate
Health care is not like any other product; everyone consumes it, whether they buy insurance or not. ‘That is a virtually universal feature of human existence,’ he told the judges. ‘Everyone is going to seek health care. Nobody can know precisely when.’
The passage of the Affordable Care Act sets the United States on the course to making health care a public good, which is why conservatives are so deeply opposed to it. For the first time, the government has a legal obligation to make health care affordable. The ACA accomplishes this in a uniquely American way, a combination of a big expansion of public coverage through Medicaid, financial penalties for employers who do not provide coverage for their workers, and income-based government subsidies for people to buy regulated private insurance.
The individual mandate is a key component of that last measure. Without the mandate, the regulated market would fail, since allowing people to buy coverage only when they need it drives up costs for everyone else and leaving people without coverage shifts the costs of their care to others. In short, a private decision not to buy a public good has substantial public consequences.
"When people choose not to buy broccoli, they don’t make broccoli unavailable to those who want it. But when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain. As a result, unregulated health insurance basically doesn’t work, and never has.
There are at least two ways to address this reality — which is, by the way, very much an issue involving interstate commerce, and hence a valid federal concern. One is to tax everyone — healthy and sick alike — and use the money raised to provide health coverage. That’s what Medicare and Medicaid do. The other is to require that everyone buy insurance, while aiding those for whom this is a financial hardship."