Posted by Jason Colon in 
(May 11, 2009 - Photo by Chip Somodevilla/Getty Images Europe)
Individual mandates would help offset the costs associated with adverse selection.
In health insurance, adverse selection is the tendency of poorer risks to want insurance more often that standard risks (i.e. sick individuals are more likely than healthy to seek out insurance coverage.)
Under a purely voluntary system, most healthy individuals would likely not choose to obtain coverage. The individuals most likely to enroll (subsidized insurance or otherwise) would be those who are older and/or who are less healthy than average. People value insurance more if they plan or expect to use it, and are more likely to participate.
Without mandates, adverse selection would most certainly drive up costs for insurers and as a result, premiums would rise sharply.
Individual mandates are an attempt to offset some of the costs associated with adverse selection.
Read more here:
Do Individual Mandates Matter?
