The Individual Mandate as a Tool of Governance

Abstract

In this paper I examine the individual mandate and the guaranteed issue provisions of the Affordable Care Act as a tool of governance. In so doing I will use a framework for understanding tools of governance described by Lester Salamon.

Salamon’s framework involves examining the specific 'tools' that government entities use to take action. The 'tool' that is the basic unit of analysis in this paper is the ACA’s individual mandate requiring all individuals to obtain insurance, coupled with restrictions on the ability of insurers to deny coverage to applicants. For want of a better term, I will refer this tool as IMGI ('Individual Mandate / Guaranteed Issue').

This paper examines the individual mandate as more than simply a method of overcoming market failures. Rather, it plays a fundamental role in a market-based tool that is designed to provide near-universal coverage. This tool is unique in American history, and as such requires evaluation. In particular, this paper attempts to evaluate this tool using Salamon's basic criteria for evaluating tools of governance, as well as by comparing it to other measures that might attempt to achieve universal coverage-such as socialized medicine or employer mandates-along several dimensions.

Keywords: health law, health care reform, governance, individual mandate

JEL Classification: H51, I19