The individual mandate is arguably one of the least popular provisions of the Obamacare, the health reform law that was enacted in 2010. Obamacare has received considerable attention in the past few years because of rising health insurance premiums. The rising health insurance premiums were at the center of the 2016 U.S. presidential elections campaign. Following President Trumpâ€™s election, Republican lawmakers have moved swiftly to repeal Obamacareâ€™s individual mandate. GOP senators are trying to repeal the individual mandate based on the argument that it would give them an extra $338 billion over 10 years for their proposed tax cuts (Luhby, 2017). Additionally, repealing this provision would also fulfill Republican lawmakersâ€™ vow to dismantle Obamacare. Repealing and removing the individual health insurance mandate would have significant impacts on the costs of health insurance and the healthcare system.
The Case of the Individual Mandate
The individual health insurance mandate in the Patient Protection and Affordable Care Act (ACA) or Obamacare as its commonly known is one of the most controversial health care issues in the United States over the past few years. The controversy surrounding this issue comes at a time when a major change is happening in the U.S. health care industry. Trump Administration have set their focus on dismantling Obamacare through repealing and/or replacing some of its provisions. The individual mandate has been singled-out as one of the major provisions to repeal as part of measures to dismantle the Patient Protection and Affordable Care Act. GOP senators are trying to repeal the individual mandate in their tax reform bill based on the argument that it would give them an extra $338 billion dollars for their proposed tax cuts over a 10-year period (Luhby, 2017). Efforts to repeal this provision have also been fueled by the substantial uncertainty on its effectiveness in improving health insurance coverage in the U.S.
The initial concept behind the individual mandate was that the larger health care industry would be effectively served if all individuals paid into the system. The mandate required every American to purchase his/her own health insurance or risk a penalty if they are not covered by a government program like Medicare/Medicaid or by their employer. While the argument that repealing this provision would generate an additional $338 billion for the proposed tax cuts is true, removing this provision would have significant impacts on health insurance coverage and the entire health care system.
The removal of the individual mandate would make the ACA market to lean towards older and sicker consumers by eliminating the requirement for younger and healthier Americans to sign up for health insurance coverage. Consequently, health insurance providers would be forced to re-evaluate the effectiveness of participating in these exchanges given that they would still be required to cover pre-existing conditions without extra charges based on the individualâ€™s medical history. This would in turn contribute to decline in enrolment, which could generate significant challenges for the relatively weak individual and small group health insurance. Removal of this provision would also have huge impacts on costs while increasing the number of uninsured Americans. According to estimates by the Congressional Budget Office, repealing this provision would contribute to a 10% increase in health insurance premiums (Schechter, 2018).
Republican lawmakers and supporters of repealing the individual mandate have argued that removal of this provision may not result in large numbers of people opting out of the exchanges as predicted. They argue that only two million people who are unqualified for the subsidies would drop out of the exchanges since they will no longer be penalized for not having health insurance (Pauly & Field, 2018). However, recent statistics have shown that there is real demand for federal health insurance exchanges. In 2018, approximately 8.8 million Americans signed up for insurance coverage through the federal health insurance exchanges established by the Patient Protection and Affordable Care Act (Pauly & Field, 2018). Buettgens & Carroll (2012) state that the individual mandate would contribute to decline in the number of the uninsured from 50 million to 26 million. Without this mandate, approximately 42 million people would still be uninsured. Therefore, the suggestion that only 2 million people would drop from the exchanges is not factual since existing statistics show that removing the individual mandate would significantly increase the number of the uninsured population. Schechter (2018) argues that an increased in the number of the uninsured will in turn increased visits to the emergency room or department.
A coalition of associations of physicians, insurance providers and hospitals support the idea that repealing the individual mandate would have devastating impact on U.S. health care system. The coalition, which includes American Medical Association, Americaâ€™s Health Insurance Plans, the American Hospital Association, and BlueCross BlueShield Association state that repealing the provision would lessen enrolment in health insurance programs and have serious consequences on the health system.
In conclusion, the individual mandate is one of the most controversial health care issues in the United States. Republican lawmakers are repealing this provision as part of their efforts to dismantle Obamacare and the belief that such an initiative would minimally decrease number of people covered in health insurance exchanges. However, is repealing the individual mandate without a workable alternative the most suitable alternative? Health care stakeholders and experts have asserted that repealing the individual mandate would substantially increase premiums as well as the number of uninsured Americans. Republican lawmakers should consider their stand and find a workable alternative to the individual mandate.
Buettgens, M. & Carroll, C. (2012, January). Eliminating the Individual Mandate: Effects on Premiums, Coverage, and Uncompensated Care. Retrieved July 11, 2018, from https://www.urban.org/sites/default/files/publication/24991/412480-Eliminating-the-Individual-Mandate-Effects-on-Premiums-Coverage-and-Uncompensated-Care.PDF
Luhby, T. (2017, November 15). What Repealing Obamacareâ€™s Individual Mandate Means. CNN Money. Retrieved July 11, 2018, from https://money.cnn.com/2017/11/15/news/economy/obamacare-individual-mandate/index.html
Pauly, M. & Field, R. (2018, January 4). Beyond Obamacare: Whatâ€™s Ahead for U.S. Health Care in 2018. Retrieved from Wharton â€“ University of Pennsylvania website: http://knowledge.wharton.upenn.edu/article/the-future-of-the-aca/
Schechter, K. (2018, February 21). Removal of the Health Insurance Mandate Could Impact our Larger Health Care System. Retrieved July 11, 2018, from http://thehill.com/opinion/healthcare/374933-removal-of-the-health-insurance-mandate-could-hurt-our-health-care-system