How Would State-Based Individual Mandates Affect Health Insurance Coverage and Premium Costs?

Research Report

How Would State-Based Individual Mandates Affect Health Insurance Coverage and Premium Costs?

Abstract

The Tax Cuts and Jobs Act of 2017 eliminated the financial penalty of the Affordable Care Act’s individual mandate. States could reinstate a similar penalty to encourage health insurance enrollment, ensuring broad sharing of health care costs across healthy and sick populations to stabilize the marketplaces. This analysis provides state-by-state estimates of the impact on insurance coverage, premiums, and mandate penalty revenues if the states were to adopt individual mandates. The work is based on the Urban Institute’s Health Insurance Policy Simulation Model, assuming each state adopts an individual mandate similar to the ACA’s.

If all states implemented individual mandates, the number of uninsured would be lower by 3.9 million people in 2019 and 7.5 million people in 2022. On average, marketplace premiums would be 11.8 percent lower in 2019. State mandate penalty revenues would amount to $7.4 billion and demand for uncompensated care would be $11.4 billion lower. The impact on coverage and on premiums varies in significant ways across the states. For example, in 2019, the number of people uninsured would be 19 percent lower in Colorado and 10 percent lower in California if they implemented their own mandates. With mandates in place, average premiums would be 4 percent lower in Alaska and 15 percent lower in Washington.

Research Area: 

Centers

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