The federal individual mandate is phased out in 2019. What happens to the ACA markets?

Great Debates
1

As part of the recently passed GOP tax plan, the Affordable Care Act’s individual mandate to acquire health insurance has been phased out beginning in 2019. The mandate was long heralded as integral to the architecture of the ACA, and, along with expanded Medicaid and federal subsidies to purchase private insurance, was considered to be one of the pillars of the ACA’s three-legged stool. The most recent CBO projections anticipate that 13 million fewer Americans will have health insurance after the mandate has been repealed.

My question is, what does the Dope believe will happen to the ACA’s private insurance markets now that the mandate has been removed? Among other things, are premiums going to skyrocket? Will people drop out en masse, or, conversely, will subsidized ACA enrollees rough it out because of the financial help that insulates them from premium increases? What will be the reaction of the unsubsidized population in that scenario?

Although Senator Lindsey Graham seems determined to resuscitate his Graham-Cassidy proposal in 2018 - which would repeal the ACA entirely - the votes likely aren’t there now that Democrat Doug Jones has reduced the GOP’s Senate majority to 51-49. Moreover, the White House seems likely to claim victory on ‘repeal and replace’ now that the mandate is gone, and will instead support marketplace stabilization measures. The mandate was always the most unpopular part of the ACA after all, and everything else that remains of it is overwhelmingly popular; attempting to undo those things would open the floodgates to a potentially unprecedented political backlash.

My own presumption is that we are headed towards a bifurcation of the ACA marketplaces. On the one hand there will be states like CA and CT that adopt state-based measures to ensure marketplace stability - such as by adopting state-level mandates or other comparable inducements to acquire insurance - and, indeed, those discussions are already happening. Incidentally, Massachusetts will still retain its state-level mandate, which predates the ACA from back in the days of Romneycare. If nothing else, that will ensure a real-life social science experiment to measure the actual effectiveness of the mandate itself.

On the other hand, of course, will be conservative states who do nothing in response to the elimination of the ACA’s mandate and who may consequently suffer from dysfunctional insurance markets, though the extent of such dysfunction will vary.

FWIW, I do not anticipate that Democrats will explicitly campaign on reinstating the mandate when and if they regain power. The mandate is simply too unpopular, and that unpopularity makes it vulnerable to relentless political attacks. More likely to me is that the Democrats will run on massively expanding Medicaid or Medicare and significantly beefing up the federal insurance subsidies. In other words, they’ll seek to make the options for federally facilitated insurance so attractive to the population that most people will willingly choose to enroll rather than being mandated to do so.

What say the Dope?

2

I don’t know what’ll happen, but why didn’t Democrats do this:

the first time around?

3

I say thanks for saying this. The claim that 13 million people will be “thrown off” health care has always struck me as highly inaccurate. Your phrasing correctly captures the fact that fewer people will buy it, no that they don’t have to, but that this is not throwing them off.

4

I too think there will be a bifurcation in the individual insurance market. This article makes sense to me - expanded access to non-ACA compliant short term nsurance will siphon off healthy customers with no pre-existing conditions. Only those who need premium subsidies or have pre-existing condions will buy on the ACA market.

The limited enrollment periods should help avoid the disaster that happened here when Washington State dropped its mandate in the 1990, but premiums will rise. This will force more and more people out of the ACA markets as premiums without subsidies become unaffordable.

Here is another recent article predicting survival of the ACA. With the individual mandate gone, repeal of the remaining, fairly popular provisions of the ACA or the whole bill just became more difficult.

5

Without a wide-enough base, there will be no ADA to buy into…but this has been pointed out so many fucking times before, hasn’t it?

6

Then it’s not a very good solution, is it? If your product only survives by forcing people to buy it, it’s not good. That’s something that might have been mentioned one or two fucking times, as well.

7

Just to be clear, that 13M number is projected for 2027. Not sure how accurate such projections are. Also, according to that same cite, premiums will “spike” by 10%. My premium just went up 25% this year. If it only goes up 10% in the next 10 years, I will start believing in God again.

8

Mine went up by ~30%. A 10% increase would be more like an anti-spike. That’d be the closest thing to “bending the cost curve down” that I would have seen since ObamaCare went into effect.

9

It was. It’s been mentioned a million times. Every single person who knows anything at all about how health insurance works has pointed out, on this board and elsewhere and a thousand upon a thousand places, that health insurance doesn’t work if you don’t have a way to get healthy people to buy it. It’s rudimentary economics.

10

Because the democrats were afraid medicare and medicaid would out compete private insurance companies due to lower administrative costs and lower reimbursement rates. When the ACA was being drafted, a strong public option tied to medicare was found to be about 20% cheaper than a private plan, so a private plan that cost 10k would have to compete with a public option that cost 8k that provided the same coverage. This would enrage insurance industries (which can’t compete) as well as physicians and hospitals (who would get lower reimbursement rates under medicaid and medicare vs private insurance).

Basically the democrats didn’t want to anger wealthy, powerful industries that could fund their political opposition.

11

But most people who buy health insurance, even before the ACA, were healthy. The ACA required (virtually) every single person in the entire country to buy insurance. If you’re doing that, then it’s not insurance anymore and you have the wrong model.

12

Wesley_Clark already laid out plenty of the reasons why this wasn’t pursued originally, but I’ll add a few more.

First of all, the Democrats could not get a public option through the Senate, mostly thanks to Joe Lieberman but also because of a variety of concerns that have been mentioned. Also, the Dems’ determination to pay for the ACA at a price beneath one trillion dollars precluded them from just giving everybody private insurance, which, at least in the Senate, was likely the option that most of them would have preferred. Medicaid expansion was consequently inserted more as an afterthought because it was a cheaper way to insure poorer enrollees rather than private coverage.

The thing is, when stacked against the GOP’s scorched earth opposition to the ACA in spite of the absence of a robust public option, and when seen in light of Medicaid expansion’s massive popularity and resilience to repeal efforts (e.g., expanded Medicaid is basically immune to all of the issues that have stymied the insurance marketplaces - the program just ‘works’), the Dems have clearly moved left on healthcare policy in favor of public insurance models. Even Max Baucus, who basically wrote the ACA with his staff and was long an opponent of single payer, has now come out in favor of single payer policies.

IMO that’s one of the reasons why the Democrats will very obviously move in that direction the next time they have total government control. Since everything can be done via 51 Senate votes now, apparently, there’s no reason why they couldn’t pursue such options.

13

You might want to read up on the Byrd Rule

14

Emphasis added. Where are you getting this idea from? The Democrats eliminated the filibuster on certain judicial appointments, and the Republicans eliminated it on SCOTUS confirmations. But otherwise, the minority can still block most legislation if it has 41 votes. The exception is the reconciliation process, as was used for the latest tax bill, but there are restrictions about when that parliamentary tactic can be used.

15

I’m genuinely curious: How do republicans get to bypass the Byrd rule when all non-partisan analysis concludes the tax bill will increase the deficit?

I thought the idea was that the bill will cost $1.5T, but that will be made up with growth so that by year 10 the bill would be revenue neutral. But all analysis from the CTO, et al, says this will not be the case. So why is it allowed? Or am I misunderstanding the Byrd rule?

16

I read a little bit more about the bill, so I think I found the answer to my question.

In case anyone else is confused, the bill will cause a higher deficit every year when compared to the baseline projection, but at year ten, the deficit meets the baseline projection. The total amount of debt increase, over 10 years, is $1.5T.

So what good does the Byrd rule do? It cares about the deficit @ year 10, but not the debt occurred between now and then? What good does that do?

17

makes it so portions of the bill expire before then, rather than carry on into perpetuity.

18

It’s crazy to me, that a non-filibuster-proof majority in the senate can just decide “hey, next FY we are going to pass some laws somewhat related to something, so uh, reconciliation, and now we just need 51 instead of 60 votes. We’ll have to assert that this doesn’t cost any money in year 10, but we can spend whatever we like in the meantime. No need to cause an uproar by killing the general filibuster, it’s really pointless anyway because we can relate anything we want to do to our blessed reconciliation rules. Hell, we related drilling rights in ANWAR and removing an insurance mandate to a tax bill, so well, I guess we can do just about anything.”

19

I keep thinking back to when the ACA was in the courts and (many) conservatives were insisting up and down that the mandate was in no way severable from the rest of the ACA. And yet here they are, severing it.

20

My layman’s understanding is that “severability” is an issue when courts are determining if they can overturn just part of a law or if the whole thing must be overturned. It’s not a constraint on Congressional action.