Republicans now control both the House and the Senate, and they are looking hard at the Patient Protection and Affordable Care Act (PPACA) individual and employer “shared responsibility” provisions.
The individual shared responsibility provision, or mandates, requires many individuals to have what the government classifies as “minimum essential coverage” (MEC) or else pay a penalty.
The employer mandate requires large and midsize employers to provide a minimum level of coverage for many employers or face the possibility of having to pay penalties.
The House Ways and Means health subcommittee today held a hearing on the mandates.
One speaker, Douglas Holtz-Eakin, showed up with an analysis of the effects of three possible alternatives to keeping the PPACA individual as is.
Another witness, Sabrina Corlette, a health policy specialist at Georgetown University, testified that PPACA has had obvious success with reducing the number of uninsured people, and that keeping the individual mandate is critical to giving insurers the ability to sell reasonably priced coverage to people with health problems.
In Washington state, for example, lawmakers adopted insurance underwriting rules similar to the underwriting rules in PPACA, but without a mandate. “As a result, the state experienced a 25 percent reduction in individual market enrollment and a decline in the number of comprehensive plans offered,” Corlette said, according to a written version of her testimony posted on the committee website. “The largest carrier in the market raised premiums by 78 percent.”
New York state adopted similar reforms, without a mandate, in the early 1990s, and its individual market suffered a similar fate, Corlette testified.
Holtz-Eakin argued that more than 30 million Americans have individual mandate exemptions this year, that the individual mandate has been more of a suggestion than a real requirement, and that the best solution is to rewrite the underwriting rules as well as eliminating the mandates, not simply to eliminate the mandates.
For a look at how Holtz-Eakin sizes up the effects of several mandate alternatives, read on.
1. Simply repealing the individual mandate.
Holtz-Eakin says getting rid of the mandate and making no other changes would reduce the number of insured people by about 7 million in 2025 but save $191 billion in subsidy spending over a 10-year period, or about $2,700 per additional uninsured person.
See also: Uninsured rate falls again
2. Repealing the individual mandate and individual medical underwriting rules.
For decades, people with health problems such as diabetes, cancer, or even obesity complained that they were unable to get private health coverage at all, or had to make do with skimpy coverage from over-crowded “risk pool” programs.