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CBO: Five-Year Individual Mandate Delay Means 13 Million More Uninsured, Higher Premiums

March 12, 2014 at 1:19 PM
BY
Edwin Park

Delaying health reform’s individual mandate for five years, as a House bill would do to offset the cost of permanently cancelling scheduled cuts in Medicare payments to physicians, would mean about 13 million more uninsured Americans in 2018 compared to current law, with similar increases in most years that the mandate isn’t in effect, a new Congressional Budget Office (CBO) analysis reveals.

Consistent with earlier CBO and outside analyses of the effects of repealing the mandate entirely, the new CBO figures show that the bill — which the House is expected to vote on Friday — would undermine health reform’s implementation and produce serious harm.

Without the individual mandate, many fewer uninsured people would enroll in job-based coverage, Medicaid and the Children’s Health Insurance Program (CHIP), subsidized private coverage through health reform’s new marketplaces, and other sources of health coverage.

Outside experts examining permanent repeal of the mandate have produced similar estimates:

  • Urban Institute: 13.4 million to 15.8 million more uninsured without a mandate.
  • Massachusetts Institute of Technology (MIT) health economist Jonathan Gruber: 24 million more uninsured without a mandate.
  • RAND Corporation: 12.5 million more uninsured without a mandate.
  • Lewin Group: 7.8 million more uninsured without a mandate.

Along with the sizable coverage losses, CBO estimates that a five-year mandate delay would raise premiums in the individual market (both inside and outside the marketplaces) by 10 to 20 percent in 2018 compared to current law (with similar increases in most years the mandate isn’t in effect).

Consistent with its previous estimates, CBO likely assumes that without the individual mandate, healthier and younger individuals would be more likely to remain uninsured, leaving the pool of people enrolled in individual-market coverage less healthy and hence more costly to cover.  That drives up premiums.

Again, CBO’s estimates are similar to independent estimates of the impact of permanently repealing the individual mandate:

  • Urban Institute: roughly 10-25 percent increase in average premiums without a mandate.
  • MIT’s Gruber: 27 percent increase in average premiums without a mandate.
  • RAND: 9.3 percent increase in average premiums without a mandate.
  • Lewin: 12.6 percent increase in average premiums without a mandate.

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