Mandatory health insurance: lessons from Massachusetts

As the Obama administration contemplates enacting far-reaching health care reforms that increase the role of government, the case of Massachusetts is worth serious study. Massachusetts' three-year experiment with mandatory health insurance (known as Chapter 58 legislation) has been judged by some health economists to be a qualified success, since it reached a primary goal of lowering the number of uninsured in the state. The rapid growth in expenditures is not altogether surprising as Massachusetts only pays 50 cents for every $1 it spends on expanding its health care initiative. As this article will explore, there is another, more hidden aspect of the Commonwealth Care program that may drive future costs far higher than originally projected. Mandating health insurance presents a dilemma that is vastly different from mandating, say, that an automobile owner pays for annual registration fees. The success or failure of the Massachusetts mandatory health insurance program has been closely monitored as a harbinger of future outcomes for a nationwide move in this direction.