(3) It will raise the cost of health insurance for everyone. This one is rather more complicated. If you currently are paying nothing for health insurance, because you choose not to buy it, your costs will certainly rise. The idea here is that insurance is a mechanism for spreading risk, and risk cannot be spread equitably if some people opt out. This involves a very direct trade-off. If we say everyone has to have insurance, then we take away the only plausible excuse the insurers have for excluding sick people. They say people will just wait to buy insurance until they need it, like someone who buys automobile insurance after his car is stolen or wrecked. We wouldn’t allow that. So if we say everyone has to have health insurance, we can tell insurers they may no longer exclude people with “pre-existing conditions” – or charge them higher premiums, which can effectively do the same thing as denial.

In some states, current rates of denial of coverage exceed 30%. The ACA will put an end to that, and requiring everyone to have coverage is essential to making that work.

Similarly, we must require everyone to have insurance at some basic minimum level. Certain things must be covered, with reasonable limits on out-of-pocket expenses. If we don’t do that, then we have the same problem as when some people opt out. My dad didn’t have a very good opinion of mental health services. I think at some level he thought people with mental illness were just weak characters who should buck up and get a grip on life. He didn’t want to pay premiums for health insurance that included mental health services, which he was sure he would never need, to subsidize those who really just needed some life lessons or a sympathetic ear. And there we have the same problem: If we allow those who think they don’t need coverage to opt out, we’re not spreading risk effectively.

The same principle applies to “catastrophic coverage.” If I can afford to pay $50,000 a year out of pocket for health care, I can find a really cheap policy to cover me for expenses beyond that, because the actuarial risk that the insurer will ever pay anything is low. But very few people can accept risk of that magnitude. If the system lets me do it because I can, then once again risk is not being effectively spread. So anyone who currently has coverage that doesn’t kick in until spending is in the catastrophic range is going to pay more under the ACA.