The indivdual manadate is neccessary to correct the problem of adverse selection. The cost of healthcare in the US is sky-rocketing and the quality of it is substandard compared to Western European countries (America excels in research but that is not the issue here). Couple of years ago the Institute of Medicine published 2 reports: Too Err is Human..... and the second report: The Quality Chasm. The 2 reports discuss the quality of care in the US and the high number of people who die due to avoidable errors. Emtala , the statute enacted by government that no hospital can turn away a person from the emergency room had the unintended consequence of increasing cost of uncompensated care due to the free loaders that forego buying health insurance and just going to the hospital emergency. With free loaders out of the equation, the insurance companies has a pool of people to cover but it is faced with the problem of information asymetry. Insurance companies do not know the history of the people who are buying the coverage (yeah, people lie on applications). Full coverage are usually bought by people who are sick and need the coverage, healthy younger people may buy less coverage or opt out because they are healthy. Insurance companies react to covering only sick people by doing its version of damage control ( otherwise know as premuim death spiral) so, the insurance company comes up with putting limits on what one can spend on disease X per year, and denies coverage to those it finds having a pre-existing condition or a family history of that disease. There is also the issue of moral hazard (google that).
The government through incentive is doing several things, one of which is the establishment of Health Information Exchanges (HIE), HIE will be a marketplace where insurance companies can compete and offer different insurance options. The States are objecting to the Federal government's involvement and invoke compact clause and blue sky laws as giving them the rights to manage inter-state commerce. Thank God, the supreme court thinks different.
What is interesting about the 26 States that sued the Federal government is that they are requesting the incentives and other money from the Obamacare funds. Yes, the cost of health insurance for small business owners and small Dr. practices will go up, but in the long run cost of healthcare will go down and quality will improve.
Bill Cliton failed in this endevour because he approached the issue from a moral point of view. On the other hand, Obama approached it from the cost side of things. Overall a win win situation in my opinion. That is not to say, come 2014 people will not be suing the governor on up for infringement on personal freedom. Those who want "personal freedom, not to buy coverage want also to freeload on visits to hospital emergency room and let the tax payer foot the bill!
Anwyayz I don't understand what the buzz is since the bill wont even take effect until 2014 
