UPDATED: Mar 13, 2020
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Drivers in the United States are required by law to buy car insurance. However, we’re not required by law to buy health insurance.
Why are we required to buy car insurance but not health insurance? It’s a complicated and politically-divisive question. We’ll try to answer it today.
State Governments Have Plenary Power, While the Federal Government Does Not
The United States is a collection of 50 states. Those 50 states are governed in surprisingly different ways. States have certain rights over their citizens – including some rights that the federal government does not have.
One of those rights is plenary power. State governments have plenary power, which means they can make any law they want on any topic. The only restriction is that the law must abide by the US Constitution. As long as states don’t infringe upon the Constitutional rights granted to everybody in the United States, states are free to make any law they choose.
The federal government, on the other hand, does not have plenary power. The federal government has specific and limited powers as outlined by the Constitution.
This is one reason why the federal government has failed to enact a national healthcare system as seen in other countries. Today, the United States remains the only developed country without universal health care: it’s because the federal government does not have the power to force citizens to purchase healthcare. It doesn’t have plenary power. The federal government does, however, have the power to charge taxes (as written in the Constitution). That’s why you’re legally allowed to go without health insurance, but you’ll also receive a tax penalty for doing so.
Here’s what it boils down to: according to the US Constitution, the federal government does not have the power to require citizens to purchase health insurance. The federal government also does not have the power to force citizens to purchase car insurance. Instead, this is a plenary power granted exclusively to states. States do have the power to force citizens to buy car insurance. States also have the power to force citizens to buy health insurance.
Interestingly, only one state is using its plenary power to require citizens to buy health insurance: Massachusetts requires all citizens to purchase health insurance or pay a fine, and this system was in place before the Affordable Care Act.
At a federal level, the Affordable Care Act implemented a similar system across the country. The federal government can’t require you to have health insurance, but they can fine you for not having health insurance. You’re legally allowed to go without health insurance, but you’ll pay a fine of $2085 per year or 2.5% of your household income – whichever is greater.
Meanwhile, 49 states – every state but New Hampshire – require drivers to purchase auto insurance. Drivers who don’t purchase car insurance can have their car impounded or even be arrested.
At the end of the day, it’s illegal to drive without car insurance – but it’s legal to live without health insurance.
Why Do States Require Car Insurance But Not Health Insurance?
We’ve established why the federal government cannot require citizens to purchase health insurance. We’ve established that states do have the power to force citizens to buy car insurance or health insurance.
Why is there such a gap between auto insurance requirements and health insurance requirements?
This is where the answer becomes unclear, controversial, and politically divisive.
On one side, you have people who oppose making health insurance requirements similar to auto insurance requirements. On the other side, you have people who support such a system.
Arguments from Those Against Mandatory Health Insurance
Some people will tell you that driving is a privilege, while life is a right. You don’t have to drive a car, for example, but you do have to have a life.
Others will argue that auto insurance protects other people while health insurance protects oneself. States require you to have liability coverage, for example, that covers other drivers on the road.
These people will also argue that driving is an “active” action while living is a “passive” action. When you drive, you need to go out and buy a car and actively drive. When you live, you’re just passively living. You didn’t have to do anything different.
Arguments from Those Who Support Mandatory Health Insurance Like Mandatory Auto Insurance
Meanwhile, people on the other side of the debate will argue opposite points. They’ll argue that for many Americans, driving is not a privilege – it’s a necessity. Drivers in rural America, for example, may not be able to access public transit. In order for them to access basic services and survive, they need to drive. They don’t have an option.
These people will also mention another crucial point: states have special insurance agencies for high-risk drivers. If you’re unable to get coverage from a traditional insurance company, then you may be required to get an SR-22, FR-44, SR-50, or FS-1 form, at which point you can buy car insurance policies from special insurance companies. The argument from the state is that certain people need to drive, and if they can’t afford or access insurance, then they’ll be forced to drive illegally without it. This is proof, according to supporters of mandatory health insurance, that driving is a necessity and not a privilege.
Ultimately, the United States remains the only first world country with no public health care system. Citizens can choose to buy private health insurance or go without it.
As a US citizen, you’re not legally required to buy health insurance. However, if you don’t have health insurance, then you’ll pay a penalty at tax time: $2,085 per family or 2.5% of your household income, whichever is greater.
Drivers do not have that same privilege: drivers who wish to legally drive on roads in the United States are required to have auto insurance. If you don’t have auto insurance, then you could get arrested. Your car could get impounded. You can’t even register a vehicle without car insurance.
The reason we require auto insurance and not health insurance is complicated and politically divisive. Much of the controversy comes over the interpretation of the US Constitution. Some people believe the Constitution forbids the federal government from requiring citizens to have health insurance. Others argue that the Constitution allows the federal government to collect taxes and that the federal government could implement a national healthcare system if they wanted to.
As mentioned above: it’s a complicated issue.