Will Americans Buy Health Insurance Without A Mandate?

September 19, 2011

Earlier this year, I wrote an article for InsuranceNewsNet offering my opinion that the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA) is not essential to achieving the law’s goal of ensuring that tens of millions more Americans have health care coverage.  The individual mandate provision requires all citizens to obtain health insurance by 2014 or pay a fine.

In the past 30 days, court rulings on both sides of the question of whether the individual mandate provision is constitutional makes it even more likely that the U.S. Supreme Court will review the matter sooner rather than later.

The unconstitutionally of the individual mandate has become the central argument of opponents in legal challenges to the entire law. They argue that if such a key provision is ruled unconstitutional, the entire law should be unconstitutional. It also remains unpopular with average Americans. In a new poll out last week from the Associated Press and National Constitution Center, 82% of respondents said “no” when asked, “Do you think the Federal Government should have the power to require all Americans to buy health insurance, and to pay a fine if they don’t?”

We’ll have to wait and see how the U.S. Supreme Court rules to know the fate of the provision. But my own opinion hasn’t changed. Based on our experience at Extend Health, if a health insurer offers seniors a private Medicare plan that meets their needs at a price they can afford, they will buy. This is because certain conditions for Medicare-eligible seniors exist that do not exist for all Americans. Most important, Medicare is guaranteed issue and requires standard plan designs.

Guaranteed issue means seniors cannot be denied coverage because of their health status. Standard plan design makes it possible to compare and contrast different plans from different carriers more easily. And these are exactly the conditions all uninsured Americans will experience under PPACA starting in 2014.

While I still believe that these conditions are necessary for large numbers of uninsured Americans to buy health plans without a mandate, today I would also argue they are not sufficient. In addition, the key stakeholders driving the extension of health care coverage to more Americans will need effective outreach programs to ensure that all Americans know their options, understand their eligibility for the federal subsidies that will be offered, and know where and how to purchase health plans.

A large group of these stakeholders – health insurers, health care providers, associations and health care nonprofits – took a major step in the right direction last week when they launched a nonprofit coalition with the mission of ensuring that “all Americans are enrolled in and retain health coverage.” Enroll America  will do this by working to ensure that enrollment processes are simple and streamlined and that people know where they can go to find the right information at the right time.

It’s too early to tell whether Enroll America will be successful. But the importance of its mission cannot be underestimated. While the ACA lays the foundation for insuring tens of millions more Americans with guaranteed issue and standard plan design, finishing the job will require that every American understand what’s coming, and what they can do and when.

Visit Extend Health — the nation’s largest private Medicare exchange.

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5 Responses to “Will Americans Buy Health Insurance Without A Mandate?”

  1. Lis Smith said

    Insurance will become more and more unaffordable under PPACA as layer upon layer of bureaucracies are formed. Have you looked at all the new boards and commissions Obamacare sets up? Last fall, in my zip code, a 25-year-old man could buy $10,000 deductible insurance for $35/month. That same policy is now $96/month. A low-cost policy and HSA are becoming a distant memory. Of course, we’ll all expect that young man to become dependent on the government. Where will the money for all these subsidies come from?

    • cholla45 said

      Hello Ms. Smith,

      There could be any number of reasons for your young man’s premium increase, but it’s certain that the ACA was not a factor at this point. And we expect that low-cost policies and HSAs will become much more common in future, actually – not a thing of the past at all. The insurance industry today is hard at work figuring out how it needs to restructure itself to survive in the post-2014 world – and you can bet they’ll learn to be more consumer friendly and will need to offer a wide variety of new products to match the requirements of individuals at all levels of income and health status.

      As for the layers of bureaucracy, the state exchanges (assuming that’s what you’re talking about) haven’t been established yet and, depending on how states set them up, they may well pay for themselves. Other boards and commissions at the Federal level are primarily focused on reducing medical costs. For example, the increased focus on reducing Medicare fraud established under the ACA has already saved Medicare some half a billion dollars.

      At Extend Health, we’ve spent a lot of time thinking about the ACA and its potential to harm or help. One of the things we think is most promising is the establishment of state-run health insurance exchanges. We’re speaking from experience as a company that runs a very large private exchange. Our enrollees are able to find coverage that matches their personal medical, prescription drug, and lifestyle requirements – usually at a lower cost than they were paying when they had employer-sponsored insurance. That’s because an exchange is an open marketplace where insurers have to compete on price and quality of service – it empowers consumers. One reason this works is that an exchange creates a “super size” risk pool – that means, the entire group is big enough that the cost of caring for the sickest members is spread around a very large number of policies – and everyone’s rates go down as people no longer use emergency rooms for their health care.

      There are many things to dislike about the bill, but there’s a great deal to like about it too. The fundamental intention – to make sure every person in the United States has affordable health care – is something that we as a company support.

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