The Importance of the Individual Mandate: Evidence from Massachusetts

Originally published in The New England Journal of Medicine

January 12, 2011
Amitabh Chandra (Harvard Kennedy School), Jonathan Gruber (MIT), and Robin McKnight (Wellesley)

Massachusetts 2006 health law's requirement, that most residents buy coverage or pay a tax penalty, has been pivotal to the law's success, according to an article by co-authored by Amitabh Chandra, a faculty affiliate of Harvard’s Rappaport Institute for Greater Boston. Writing in the January 12, 2011 issue of The New England Journal of Medicine, Chandra, Jonathan Gruber (MIT), and Robin McKnight (Wellesley) compare the health of those who signed up state-subsidized health insurance before and after the state law requiring everyone to have health insurance or pay a fine took effect in 2007. They found that enrollees who signed up for the insurance "before the mandate went into effect were nearly 4 years older, were almost 50% more likely to be chronically ill, and had about 45% higher health care costs than those who signed up once the program was fully effective." This, in turn, suggests that the so-called "individual mandate" will play an important role in the implementation of federal health-care reform efforts, particularly because the federal program does not subsidize insurance as heavily as the state program.