July 23, 2018
Dive
Brief:
- If all
states created individual mandates that required residents to have health
insurance, there would be nearly 4 million fewer uninsured people
next year and 7.5 million in 2022, according to a new Commonwealth Fund study.
- State-created
individual mandates would also decrease premiums on Affordable Care Act
plans by 11.8% in 2019.
- Uncompensated care for hospitals
would drop by $11.4 billion and states would gain $7.4 billion from state
mandate penalties, according to the report.
Dive
Insight:
Congress
nixed the ACA’s individual mandate penalty as
part of the tax package at the end of last year. Connecticut, Vermont,
Hawaii, Washington and Maryland have all discussed instituting mandates this
year, but despite those efforts, only New
Jersey has joined Massachusetts in implementing one.
ACA
advocates say the individual mandate is critical to maintain a balanced risk
pool. Without it, healthier members will drop coverage and leave the sickest in
the ACA plans, which will increase premiums, they argue.
In
its report, The Commonwealth Fund used the Urban Institute’s health insurance
policy simulation model to estimate coverage and cost impacts of having state
mandates. The estimate assumed that each state would create a similar
individual mandate.
If
all states created an individual mandate, the impact would vary by state,
according to the report. For example, Colorado would see 19% fewer uninsured
people in 2019, while California would have 10% fewer uninsured people. The
average premiums would also differ. Alaska would see a 4% average drop in
premium costs, while Washington would have a 15% decrease.
If
all states implemented a mandate, employer-sponsored health insurance, nongroup
and Medicaid/Children’s Health Insurance Program plans would all see increased
membership.
Nongroup
plans without tax credits would see the biggest increase in members,
gaining more than 2.7 million enrollees in 2022.
That
infusion of new members, who will likely be healthier, would stabilize the
overall nongroup market and bring down premiums. However, those people would
also not benefit from tax credits. So, they would pay more for coverage than
people with lower incomes.
Despite
the report’s favorable view of the mandate, The Commonwealth Fund acknowledged
that there are speed bumps. For instance, eight states don’t collect income
taxes, so an individual mandate that penalizes people at tax time wouldn't
work. Also, many state leaders oppose the ACA and surely won’t want to
bring back the individual mandate, which was one of the more unpopular pieces
of the health law.
“Even
states that have governors and state legislators who are generally supportive
of the ACA are likely to find it politically challenging to impose mandate
penalties,” the fund said.
The
Republican-led Congress whacked a vital part of the ACA when it eliminated the
penalty starting in 2019. A recent joint report from
the Center for Health Policy at the Brookings Institution and the USC Schaeffer
Center for Health Policy & Economics said the number of uninsured Americans
will rise, but didn't estimate a specific number. The report did say that about
8 million people would have been uninsured without the mandate in 2016.
The Congressional Budget Office projected
13 million people will lose or drop insurance over the next decade without
being required to have coverage. Also, ACA plan premiums will increase by 10%
annually in most years because of people dropping coverage, CBO said.
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