As the White House and House Republicans negotiate to avoid a government shutdown, one of the compromises rumored to be on the table is delaying the individual mandate set out in the Patient Affordable Care and Protection Act. A delay could also be linked to legislation required to raise the debt ceiling.
Given that the Obama administration already delayed the employer mandate—which requires companies with at least 50 employees to provide affordable health insurance to workers or pay a penalty—many policymakers assume rescheduling the individual mandate to acquire insurance won’t cause any further harm. But that assumption is dangerously wrong.
Recently I co-authored two papers detailing the implications of delaying both mandates, and found that, unlike delaying the employer mandate, putting off the individual mandate is not a modest change to the law.
Looking at the big picture, delaying implementation of the individual mandate would significantly increase the number of non-elderly people living without health insurance when compared to a fully implemented health reform law. However, delaying the employer mandate is likely to result in only a very small increase in the number of uninsured when compared to full implementation.
Delaying the individual mandate is also likely to significantly increase average premiums, because a disproportionate number of unhealthy individuals would join or stay on the rolls, while more healthy people would be less likely to purchase insurance.
This could destabilize the insurance pools and create pressure to revoke the law’s consumer protections.
Approved 2014 premiums in the nongroup, and possibly also in the small group, insurance markets, both inside and outside of exchanges, would need to increase without the individual mandate. This would force the premium setting and approval process to restart, delaying renewals of prior (non-grandfathered) coverage and issuance of new coverage.
And finally, delaying the individual mandate is likely to result in a significant increase in uncompensated hospital care relative to full implementation of the law, putting hospitals at greater financial risk.
These are serious implications that lawmakers and the administration should carefully consider as they move forward in their negotiations. These risks weren’t an issue when the decision to delay the employer mandate was made, but they are real risks in this instance and should not be taken lightly.
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