Mandating health insurance coverage will benefit insurance companies, but will not improve the health care system, according to Ron Paul, a Republican congressman representing Texas.

Ron Paul

Paul, a doctor who failed in a bid for the presidency in 2008, says mandating health insurance coverage changes health insurance to a social welfare program. “Once the government gets in [to health insurance] and either mandates something or regulates it or subsidizes it, it is no longer insurance,” Paul to told NPR.

“For decades the insurance industry has been lobbying for mandated coverage for everyone,” Paul wrote in an essay, “Healthcare Reform Is More Corporate Welfare,” posted on his website Sept. 14. “The stipulation that pre-existing conditions would have to be covered seems a small price to pay for increasing their client pool to 100[%] of the American people.”

The immunity health insurers will obtain from civil suits for not providing required coverage is “a big red flag,” he says. “The [coverage] requirements on them are probably meaningless. Mandates on all citizens to be customers of theirs, however, are enforceable with fines and taxes,” he wrote.

The congressman suggests that if the cell phone industry or cable TV industry “received such a gift from the government” in the form of a mandate forcing everyone to use their services, it would be “an incredible and completely unfair boon to that industry, at the expense of freedom and the free market.”

Discouraging free-market solutions to the health care problems will stifle market innovation. “Alternative healthcare delivery models will be at an even stronger competitive disadvantage if families are forced to buy into the insurance model. And yet, the reforms are sold to us as increasing competition,” Paul wrote.

He questions what might happen if Congress and President Barack Obama stayed out of health care reform. “Then the free market, not lobbyists and politicians, would decide which models work and which did not,” he speculates.