• So what happens without a mandate?

    Ezra Klein reminds us of a piece by Jonathan Gruber from back this summer.  In it, Gruber discusses why health care reform is a “three-legged stool” and why we need the mandate and subsidies on top of the regulations. I made a few charts to help people understand what might happen if the (unpopular) mandate is found unconstitutional, but the rest of the law remains (which is possible).

    Remember – the mandate is there to prevent people from gaming the system. If there are great regulations and no mandate, healthy people can forego insurance until they get sick. This fractures the risk pool, and makes insurance more expensive for those who get it.

    First, here is what might happen to your premiums* if the mandate is removed:

    Your insurance premiums will go up. Significantly. In fact, the average premium will be over 25% higher by the end of the decade than if we leave the law alone.*

    Here’s what happens to coverage:

    The ACA is projected to reduce the number of uninsured by more than 32 million; take away the mandate, and that number drops to less than 7 million. But here’s where it gets even worse. The ACA strengthens the private insurance market, so that the number of people with employer coverage is expected to drop by only about 4 million. Take away the mandate (which protects private insurers) and the number of people with employer based coverage drops by more than 13 million.

    Basically, if you remove the individual mandate, you make insurance cost more, cover less people, and you make private insurance weaker. Be careful what you wish for.

    UPDATE: Fixed a critical typo.

    UPDATE 2: Added the following footnote:

    * These are premiums for plans in the exchanges, not employer-based insurance premiums.

    • Well, the premiums will go up, the subsidies will go up, the costs will be too high to the governments, but access to health care will become popular to too many to allow repeal, so the result will be diddling with the law.

      But there will be diddling with the law in any case.

      One solution is an income tax on everyone which is then credited to the agent providing coverage, typically the insurer. And that would have been an easier way to solve the problem; the IRS collects the tax just like Medicare, but on all income, a percentage to an income limit. The IRS would put it into a trust fund, and insurers and Medicare and Medicaid would draw a fee for every insured they cover.

      The cost of uncompensated care mandated by EMTALA or similar would be reimbursed from the residual funds.

      And medical debt could be classified as not being dischargeable in bankruptcy if incurred while uninsured.