A new study upends the argument that the Affordable Care Act (ACA) can’t work without an individual insurance mandate—which, strangely enough, could end up being the ACA’s salvation.
The study examined the potential impact on the affordability of health insurance premiums should the Supreme Court declare that the insurance mandate is unconstitutional without overturning the rest of the ACA. The study didn’t address the constitutional issues, only the pragmatic argument that without a requirement that people buy coverage, the young and healthy will choose to go without health insurance until they are sick, knowing that the ACA prohibits insurers from turning them down or charging them more for pre-existing conditions. This could drive up premiums for everyone else—forcing more people to drop coverage until the whole insurance market collapses.
But this study found that removing the mandate will have a far more modest impact, assuming that “all other features of the act—including the Medicaid expansion, premium subsidies, employer tax credits, and employer penalty provisions—were unchanged”:
“Neither our simulations nor the available research demonstrates that the mandate is necessarily a ‘linchpin’ of the Affordable Care Act, as one federal judge concluded. Our study suggests that although the mandate has important effects on premiums and coverage, it might not be essential to the act’s successful implementation. The premium increase and the loss of coverage might be judged acceptable if that meant preserving the remainder of the act. We believe that there is good reason to expect that the act would still cover 21–24 million of those who would have been uninsured otherwise, even if the mandate is removed.”
The “primary reason” why removing the mandate would have less of an impact than others have predicted is that the ACA’s tax credit subsidies would insulate most people from the costs associated with premium increases, making it unlikely that people would drop coverage in droves. Other features of the law, like open enrollment periods, would also mitigate the impact on premiums and loss of coverage associated with removing the mandate, the authors concluded.
Now, I have to say that there is a lot of uncertainty here, because the Congressional Budget Office and many other independent analysts predict that removing the mandate would have a much bigger impact on premium increases, dramatically reducing the number of people who would get coverage. Even this study found that some 8 million fewer people would have health insurance if the mandate is eliminated.
But consider this oh-so-sweet irony: if the Obama administration loses the argument in the Supreme Court that the individual insurance mandate is constitutional, and it is removed by the justices without overturning the rest of the law, it could end up being the ACA’s political salvation. Polls have consistently shown that the mandate is the least popular part of the ACA, dragging down support for the overall law. But most of the rest of it—including the subsidies and the prohibition against turning people down or charging them more because they are sick—is supported by an overwhelming majority of Americans. It will be much, much harder to repeal the ACA if the unpopular mandate goes and the popular stuff remains, in which case conservative critics may lose by winning, and the ACA’s supporters may win by losing. Instead of driving a stake in the heart of “ObamaCare,” as the critics had hoped, it could help keep the law alive. How is that for a neat trick or treat on this Halloween night?
Today’s question: Do you think the Affordable Care Act will be more or less likely to work and survive if the individual insurance mandate is eliminated?