doctorThe health insurance industry is very nervous about the reform bills making their way through Congress, and rightfully so, as lawmakers are getting cold feet about requiring individuals to buy insurance, or penalizing them if they do not.

Arguments about individual liberty aside, mandating the purchase of coverage is a critical, make-or-break issue for carriers, because early on the industry agreed to abide by the one reform everyone seems to support—eliminating the right to deny coverage or charge too high a premium differential due to preexisting conditions.

This is the only way this bargain can work. If people may put off buying coverage until they get sick, assured that no carrier can reject them or charge a considerably higher premium, it defeats the purpose—which is to broaden the pool as widely as possible with healthy individuals to spread the risk and lower the cost for all.

If no individual mandate is imposed, or if fines are too affordable, it’s the worst-case scenario for carriers, more than offsetting the benefit of drawing millions of more customers into the health insurance market.

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