BEYOND THE NUMBERS
Delaying Health Reform’s Employer Responsibility Requirement No Reason to Delay Individual Mandate
Senate Minority Leader Mitch McConnell called again for a delay in health reform’s individual mandate (which requires most Americans to obtain health coverage or pay a penalty) in response to the Administration’s decision to delay, for certain smaller firms, the employer responsibility requirement until 2016. That remains a decidedly harmful and politically motivated idea.
As we explained last fall, a delay in the individual mandate is a central piece of the ongoing effort to dismember health reform, and it would produce significant harm. It would have caused 11 million more Americans to remain uninsured in 2014 — erasing 85 percent of the expected coverage gains — and raised premiums in the individual market for many others, according to the Congressional Budget Office (CBO).
Delaying the individual mandate also would disrupt the health insurance marketplaces just as they are getting fully established. For example, it would probably lead many healthier uninsured people, who would have bought marketplace coverage, to instead wait until they got sick to buy it. That, in turn, would make the pool of people with marketplace coverage older and sicker, forcing insurers to set their premiums much higher for 2015 than for 2014 (a year in which they assumed the individual mandate would be in effect). Some insurers might withdraw from the marketplaces entirely for 2015.
Indeed, that’s a likely goal of those who seek a delay in the individual mandate. A year from now, they would demand another one-year delay and then another — or even outright repeal. They would likely argue that health reform has failed, even though delaying the individual mandate would cause the results they would likely cite as evidence, like sharply limited coverage gains and higher premiums than under current law.
Moreover, there’s no comparison between the relatively modest effect of delaying the employer mandate for some employers for another year and the serious harm from delaying the individual mandate.
The Urban Institute, for example, expects that this week’s Administration decision on the employer requirement likely won’t have much impact on successful implementation of health reform. And CBO estimated that the Administration’s earlier delay in the employer responsibility requirement (from 2014 to 2015 for all employers subject to the requirement) raised the number of uninsured by less than 500,000 people in 2014 — a far cry from the 11 million more people who would have been uninsured this year if we delayed the individual mandate. To assume that delaying the individual mandate would produce similar effects as delaying the employer requirement would “be dangerously wrong,” Urban warned last year.