Bill would require all Californians to buy insurance - San Francisco Chronicle

Mandating health insurance

A universal health care initiative expected to be introduced in the state Legislature this week would:
-- Force Californians to carry basic health insurance with a maximum deductible of $5,000.
-- Require proof of insurance to be submitted with state tax returns. Failure to secure coverage would result in losing tax refunds or having wages garnisheed to pay for a basic policy.
-- Create quasi-public purchasing pools made up of counties or regions open to individuals and employers.
-- Provide coverage subsidies for people who work at companies with fewer than 50 employees and who earn less than 200 percent of the federal poverty level.

It's not immediately obvious that requiring everyone to purchase insurance would be better than the status quo or other alternatives. But it makes some sense. The essential problem it addresses, not mentioned in the article, is that people generally do want to insure against risk, but the currently healthy tend to prefer to go uncovered and the sick don't. So the cost of insurance pushes up towards the cost of the care of the sick. That's not insurance. For a more theoretical explanation go here.