Drew Altman, Kaiser Family Foundation
January 14, 2020
The Affordable
Care Act’s insurance market has not been materially affected by the elimination
of the individual mandate penalty — undercutting a key argument in the lawsuit
urging the courts to strike down the health care law.
The big
picture: Healthy enrollees have not left the market in droves,
premiums have not spiked and there has been no market death spiral.
Details: Premiums
spiked in earlier years, as insurers figured out the market and anticipated the
elimination of the penalty, but are declining by an average of
2-3% in 2020.
·
Healthy people do not appear to
have fled the market. ACA enrollees spent fewer days in the hospital in 2019
than in the previous four years.
·
The financial health of insurers participating in the ACA
marketplaces is stable, and dramatically improved since the early years of the
ACA.
·
Other elements of the ACA, such as the Medicaid expansion,
appear to have been largely unaffected by the elimination of the penalty.
Flashback: ACA
historians will remember that many critics of the mandate believed the penalty was too weak to
drive the healthy into the marketplaces from the start.
·
And real-world experience has shown that premium subsidies have
been more important than the mandate penalty.
There are still well-documented
problems in the individual market.
·
Policies are unaffordable for many people who do not receive
subsidies. Deductibles are very high (averaging $4,544 per person for a
“benchmark” plan).
·
And insurer participation in some rural areas remains
fragile.
But these
problems existed with the mandate penalty in effect.
·
Experience on the ground has demonstrated that the marketplaces
and the larger ACA continue to function, even when “severed” from the mandate
penalty.
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