Transcripts

"Economic Choices '08"-Health Insurance Mandates

SUSIE GHARIB: Health care mandates, the concept that every American should be required to buy insurance, have become a major issue in the presidential campaign. As the first primaries approach, the candidates are using support for or opposition to mandates as a rallying cry. Tonight, as we continue our reports on "Economic Choices '08," Darren Gersh examines the pros and cons of mandates.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Supporters of a health insurance mandate say it is the only way to insure all Americans contribute to the health care system. And health economist Len Nichols says that's the only way to solve what economists call the free-rider problem.

LEN NICHOLS, DIR. OF HEALTH POLICY, NEW AMERICA FOUNDATION: If you don't have mandates, you're not going to get everyone covered. If you don't get everyone covered, hospitals are still going to have too much uncompensated care. Insurers are still going to worry about just getting the sick and not the healthy and they're going to charge higher prices.

GERSH: Hillary Clinton and most of the other Democratic candidates agree. But fearing the impact requiring insurance will have on the budgets of low-income families, Barack Obama opposes mandates. So do all the Republican candidates, though former Massachusetts Governor Mitt Romney says he would leave the issue to the states. Health policy analyst Joe Antos says Republicans believe the best way to increase health care coverage is to reform the marketplace and bring down the cost of insurance. And that's not all.

JOSEPH ANTOS, HEALTH POLICY ANALYST, AMERICAN ENTERPRISE INSTITUTE: A number of the candidates argue very strongly and very clearly that there needs to be increased subsidies of one sort or another for low-income people. They recognize that if you don't have the money, no matter how attractive the product is, you won't be able to but it.

GERSH: The political focus on mandates has raised interest in the business of providing individual health insurance. In a new report, pricewaterhousecoopers argues that market could soon take off. But Carter Pate, global and U.S. health industries leader for the firm, says cost remains the biggest hurdle.

CARTER PATE, HEALTH INDUSTRIES LEADER, PRICEWATERHOUSECOOPERS: The average person really doesn't want to pay more than $500 or $600 for health care insurance if they have to pay for it out of their own pocket. That seems to be the barrier right there. We find that for true insurance, it's probably more like $4,000 to $5,000.

GERSH: So far, none of the presidential candidates have been very specific about how much their health care plans will cost. That will depend largely on how effective the reforms are at cutting costs and how generous the subsidies are for individuals who are encouraged or forced to buy their own health insurance. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.