The Washington Post offers an editorial arguing that the government cannot constitutionally impose a mandate that all uninsured persons obtain health insurance. Well, yes and no.
The otherwise uninsured would be required to buy coverage, not because they were even tangentially engaged in the "production, distribution or consumption of commodities," but for no other reason than that people without health insurance exist. The federal government does not have the power to regulate Americans simply because they are there....The first thing to consider is that, with a health insurance mandate directed at employers, most individuals are going to end up insured through their jobs. So how about we create a new payroll tax to cover health insurance but instantly credit back any deductions made for health insurance through the employer - both the employer's share and the employee's share. Employers who do not offer insurance will collect the payroll tax, implementing the same instant credit consistent with their employees' documentation of health insurance coverage.
This leaves mandate supporters with few palatable options. Congress could attempt to condition some federal benefit on the acquisition of insurance. States, for example, usually condition issuance of a car registration on proof of automobile insurance, or on a sizable payment into an uninsured motorist fund. Even this, however, cannot achieve universal health coverage. No federal program or entitlement applies to the entire population, and it is difficult to conceive of a "benefit" that some part of the population would not choose to eschew.
The amount paid in premiums will be confirmed through end-of-year filings by health insurance companies. The self-employed will either insure so as to qualify for the tax credit, or pay the tax. So you could choose not to buy insurance, sure, but you would end up paying a tax in the approximate amount of what basic healthcare coverage would have cost. No mandate - just the choice between buying insurance or paying a roughly equivalent tax without getting insurance. Collected taxes can be used to help offset the cost of caring for the uninsured.
Why wouldn't that work?
Me? I'm off to start my new insurance company. Here's the business model: I charge a premium in the lowest permissible amount (the least expensive plan you can buy to avoid any penalty from the mandate), use that to obtain reinsurance for losses above, say, $50,000, and offer essentially no other coverage. Participants can fund HSA's, if they wish. If a participant gets through a year without making a claim, I refund... let's say 50% of their premiums. The rest goes to the cost of administering reinsurance, administering claims (something I would outsource), and profit. Coverage for pre-existing conditions? Not a problem. Unhealthy people will stay away in droves. Anybody want to invest?