Mandates and the Affordability of Health Care

Many people are willing to pay for health care services but unwilling to purchase health insurance. About half of uninsured people who could afford to purchase health coverage choose to forgo buying insurance.

The U.S. housing and agriculture departments use an “affordability” standard to allocate subsidized services to low-income households. The implementation of universal health care coverage in Massachusetts brought about a surprising use of the affordability standard. Massachusetts used affordability to determine who would be exempt from the mandate that all state residents purchase insurance. In light of what took place in Massachusetts, this article explains differences between affordability standards that measure health care costs and standards for other merit goods (i.e., food and housing). To further her explanation, the author discusses relevant patterns in the consumption of health care coverage and services.

Key Findings:

  • More than one-fourth of low-income households incur health care expenses that they cannot afford.
  • Premiums that do not accurately reflect risk increase the likelihood that individuals will forgo affordable health coverage.

The range of costs for health services is much greater than for food and housing. This article examines the “affordability” standard with regard to consumption patterns for health coverage and services.