Avoiding the Inherent Free-Rider Problem in Healthcare Reform

In an interview, President Obama avoided direct comment on the jailtime provision included in the House version of the bill that was narrowly passed Saturday night. However, he did speak of incentives in broader terms and correctly identified the inherent free-rider issue that arises almost any time there is a mandatory system such as universal healthcare that depends to some extent on personal action.

An imprisonment penalty was already removed from the healthcare bill in the Senate Finance Committee. This likely shifts the odds against a final bill actually including such a provision. However, even for those who vehemently oppose such a penalty, the free-rider problem is one that will likely have to be addressed if universal healthcare legislation is passed. It remains to be seen how this is accomplished, but the most likely scenario is fines for those who do not insure themselves. However, as parties continue to argue about not just the provisions, but merits of the plan, this is not likely a topic that will disappear any time soon.