RAND Corporation releases report on ACA without individual mandate

Posted on February 16, 2012 | No Comments
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The RAND Corporation recently released a report addressing the question “How would removing the individual mandate from the Affordable Care Act (ACA) affect the number of insured individuals, premium costs for those who are insured through the exchanges, and government spending on health coverage?” RAND addressed the question by using COMPARE (Comprehensive Assessment of Reform Efforts) microsimulation model to predict the effects of a possible Supreme Court decision invalidating the individual mandate provision in the Affordable Care Act (ACA) while keeping the other parts of the law intact. The authors predict the effects of such a decision on health insurance coverage overall and for subgroups based on income. They also estimate where people will obtain insurance in scenarios with and without the mandate and how the elimination of the individual mandate will affect insurance premiums.

The analysis predicted that, if the individual mandate were to be eliminated: (1) 12.5 million people who would have otherwise signed up for coverage will be uninsured. (2) Premium prices in the non-group market will increase by 2.4 percent. (3) Total government spending will increase modestly, from $394 billion to $404 billion in 2016. (4) The amount of government spending per newly insured individual will more than double, from $3,659 to $7,468. The study estimates a smaller effect on premiums than comparable studies because the RAND team uses a method that accounts for the difference in the age composition of enrollees with and without the mandate.

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RWJF and Urban issue paper on the effect of the minimum coverage provision

March 27, 2012

The minimum coverage provision, or individual mandate, is a provision under the 2010 Affordable Care Act (ACA). According to a short paper recently issued by The Robert Wood Johnson Foundation and the Urban Institute, if the ACA were in effect today, 94 percent of the total population (93% of the nonelderly population) or 250.3 million people out of 268.8 million—would not face a requirement to newly purchase insurance or pay a fine. In this brief, the authors use the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the number and share of Americans potentially subject to the mandate, identify their insurance status absent the ACA, and simulate eligibility for Medicaid and exchange-based premium and cost-sharing subsidies. To allow the most direct comparison of postreform coverage with coverage absent reform, their analysis treats the provisions of the ACA as if fully implemented in 2011. The results of their analysis are presented in a table format—with estimates of the population exempt from the mandate; the population potentially affected by the mandate but already covered by insurance of some type; and the remaining population required to newly purchase coverage or pay a fine.

RWJF report assesses the individual mandate in a new report

January 12, 2012

Today the Robert Wood Johnson Foundation (RWJF) released a report authored by researchers from the Urban Institute called "Eliminating the Individual Mandate: Effects on Premiums, Coverage, and Uncompensated Care: Timely Analysis of Immediate Health Policy Issues." The report examines the effect that eliminating the individual mandate—the requirement for most Americans to have health insurance or face a penalty—would have on health insurance coverage, spending, premiums and uncompensated care. Using the Urban Institute’s Health Insurance Policy Simulation Model, the researchers simulated the Affordable Care Act as enacted, as well as several alternative scenarios of health reform without the mandate. The authors find that without the mandate: 1) Between 40 and 42 million would remain uninsured as opposed to 26 million with the mandate; 2) Private coverage would fall 11 million, covering 4 million fewer people than it would have without reform; 3) Uncompensated care spending would be much higher due to the increased number of uninsured; and 4) Individual premiums in the health benefit exchanges would increase by 10 percent in a scenario assuming high exchange participation, and by 25 percent with a low participation scenario.

Health Affairs article estimates that ACA would still cover 23 million without individual mandate

October 27, 2011

Many policy gurus fear that repeal of the minimum coverage provision and corresponding penalty from the Affordable Care Act (ACA) would lead to adverse selection and thus a premium spiral. However, a recent Health Affairs article highlights other ACA provisions that would mitigate the negative repercussions of an individual mandate repeal. For example, the ACA subsidies to help people purchase coverage would restrain a premium spiral by absorbing much of the impact of premium increases. The article proffers that without the individual mandate, 7.8 million people would lose coverage, as opposed to other estimates in the 16-24 million range. In sum, the ACA would still cover 23 million people who otherwise would have been uninsured. Although the individual mandate would have important effects, the article says, perhaps it is not crucial to the successful implementation of health reform.

CRS issues report on individual mandate under ACA

August 24, 2011

The Congressional Research Service (CRS) has released a report on the individual requirement to purchase health insurance (individual mandate) under the Affordable Care Act (ACA). The report, "Individual Mandate and Related Information Requirements under PPACA," lays out the various exemptions granted from the individual mandate provisions under the law, as well as explains how enforcement of the mandate by the IRS will work once the mandate takes effect in 2014.

GAO issues report examining alternatives to individual mandate

March 28, 2011

The U.S. Government Accountability Office (GAO) has issued a report that examines ways to encourage individuals to voluntarily obtain health insurance. GAO was asked by Congress to undertake the report due to the chance "...that legislative or judicial action could result in a change to, or elimination of, the mandate..." and the report is based on multiple interviews from experts regarding alternative approaches to the individual mandate to purchase health insurance under the Affordable Care Act (ACA).

Legal Challenges to the Affordable Care Act

December 14, 2010

This is an updated version of a brief originally published on November 15, 2010. Shortly after President Obama signed the Patient Protection and Affordable Care Act (ACA)^[1] into law, opponents of the law filed a series of legal challenges in federal court. This health reform implementation brief provides an overview of the legal challenges by identifying and providing summaries of the two major cases filed by states and select claims, not raised by the states, from other cases.

Michigan judge rules individual mandate constitutional

October 8, 2010

US District Court Judge George Steeh has dismissed a case claiming Congress acted beyond the scope of its powers under the commerce clause when it included a requirement that individuals carry health insurance in the health reform law. “The decision whether to purchase insurance or to attempt to pay for health care out of pocket is plainly economic,” he wrote in his opinion, and this has a "clear and direct impacts on health care providers, taxpayers and the insured population, who ultimately pay for the care provided to those who go without insurance.” He concludes, “While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.”