Mandatory health insurance can be a policy directed against free riding behavior by those who expect to be covered by others in case of emergency or be part of a paternalistic intervention if individuals insure too little because they underestimate their health risks. Combined with partial social health insurance, it may bring about efficiency improvements in health insurance markets characterized by adverse selection. It can help to enforce cross-subsidies from those with low health risks and high income to high-risk and low-income individuals. To meet these objectives, mandatory health insurance needs to be accompanied by additional measures.