Fined for Inadequate Insurance

Wendy Williams and her husband liked their health insurance plan.  The premium and annual deductibles made sense for them, and a more “gold-plated” plan was not worth the money.  Yet Massachusetts’ health care regulators disagreed, and forced the Williams to pay a $1,000 fine if they wished to keep their insurance plan — a plan they prefer to a comparable state-approved alternative.

It wasn’t always this way.  When the Massachusetts mandate was first adopted, their plan was just fine.  But then the rules changed.  The state no longer accepts their insurance plan, even though they are fully insured and are not imposing their health care costs on other taxpayers.

If the federal government adopts an individual mandate, Ms. Williams fears her experience could soon replay itself nationwide.  She’s right to fear.  Once there is an individual mandate, interest groups will flock to Washington seeking to have their preferred treatment or service incorporated into the requirements for acceptable health care plans.  Over time, the requirements will grow, and the cost of health care plans for many Americans will increase as a result.  Consequently, many individuals who have health care plans that fully meet their needs will suddenly find themselves “underinsured” — and taxed fined as a result.