BEYOND THE NUMBERS
Previewing a House GOP Leaders’ Health Plan, #3: No Individual Mandate
Any health plan from House GOP leaders would almost certainly lack the Affordable Care Act’s (ACA) requirement that most people have health insurance or pay a penalty, and that would prove very harmful.
As we’ve explained, the individual mandate leads many more people to enroll in job-based coverage, Medicaid, the Children’s Health Insurance Program, individual-market coverage (such as through the marketplaces), or other coverage sources. So any health plan without such a requirement would leave many more people uninsured than under the ACA. (A House GOP leaders’ health plan would also likely provide much less help than the ACA to make coverage more affordable for low- and moderate-income people, who constitute the overwhelming share of the uninsured.)
The individual mandate is also critical to the ACA’s reforms to the individual insurance market, particularly those barring insurers from denying coverage to people with pre-existing health conditions or charging them higher premiums. Without the individual mandate and subsidies to make coverage more affordable, many healthier people would likely do without coverage, leaving the pool of those with coverage sicker, on average — and thus costlier to cover. That, in turn, would drive up premiums in the individual market, pushing even more healthy people out of the pool over time.
The Congressional Budget Office has warned that eliminating the ACA’s individual mandate and subsidies while leaving its market reforms in place could destabilize the individual market, “leading to very low or no participation by insurers and consumers.”
Because a House GOP leaders’ health plan would almost certainly lack an individual mandate, it also would likely omit most if not all of the ACA’s market reforms and consumer protections, including those for people with pre-existing conditions. It would effectively reinstate the pre-ACA individual market, which excluded people in poorer health entirely or charged them unaffordable premiums.
Finally, a House GOP leaders’ health plan likely wouldn’t include a provision similar to the ACA’s requirement that larger employers provide affordable, comprehensive coverage or pay a penalty. Without such a requirement, fewer employers would newly offer coverage and some employers would drop coverage or scale it back so that it’s less affordable. Many workers losing job-based coverage would end up uninsured because they have pre-existing medical conditions or their tax subsidies under the plan would likely be too small to make coverage affordable.
Read the rest of our series previewing a House GOP leadership health plan here.