Obamacare survives death of ‘individual mandate’

When Republicans used a GOP tax bill to kill a provision in the 2010 health care law requiring most Americans to buy health insurance or pay a penalty, President Donald Trump boasted his party had "repealed the core of disastrous Obamacare."

Obamacare supporters also predicted that repealing the so-called individual mandate would gut the law, pushing the rates of Americans without health coverage higher and throwing insurance markets into chaos.

But more than six months after Republicans essentially eliminated the mandate by abolishing the tax penalty for violators, the impact appears minimal.

While early indications suggest Ohio's uninsured rate -- down to 6% as recently as 2017 -- has grown, policy experts say the mandate isn't likely the reason.

"The individual mandate was never that strong of motivating factor or forcefully enforced," said Amy Rohling McGee, president of the Health Policy Institute of Ohio.

Meanwhile, insurance markets in Ohio and elsewhere remain stable this year.

In Ohio, enrollment in the individual market dropped a bit in 2019 and premium costs have begun to level off after some bumpy years, according to federal data.

Nearly 207,000 Ohioans purchased health insurance through a federally operated exchange in 2019, down 15% since 2016. It's unclear why people dropped coverage or whether they gained insurance elsewhere.

Ohio is mirroring what's happening nationally.

Cynthia Cox, director the Affordable Care Act program with the Kaiser Family Foundation, said while "it's a little early in the year," it appears that even though enrollment for individual market insurance has decreased a little, the overall financial performance of insurers has remained steady.

"I think at least the early indications are that while there might be a drop in enrollment, the market itself is remaining stable," she said, cautioning again that "it's still early on."

She said Kaiser still doesn't know what's happened to those who have left the individual market and won't be able to determine that until after a year, when they can have information to determine whether those people became uninsured, for example, or gained coverage through a new job.

Kaiser had been concerned that healthy people would leave the market, driving prices up as the sick remained behind. But while the costs have "gone up a bit," she said, "it's not much more than you would expect with the cost of health care going up each year."

By contrast, Ohio saw annual premiums jump 28% between 2016 and 2019, from $4,795 a year to $6,161 -- one reason, analysts say, why Ohioans may have dropped insurance. But costs are projected to drop 7% next year and return to 2018 levels, according to state data.

Part of that is because insurers priced a little high in 2018 so they could build a cushion to prepare for a market destabilization. It turns out they haven't needed it yet.

"It's at least so far not looking like the market is becoming destabilized," Cox said. While the repeal of the individual mandate drove premiums up a bit, "other factors had a downward effect on premiums, so it all neutralized."

Kaiser is now studying premiums going into 2020. So far, the increases "have been pretty modest," Cox said. Most states posted single-digit premium increases.

Sara Collins, vice president of health care coverage and access for the Commonwealth Fund, which supports independent research on health-care issues, said the impact of the mandate's repeal has been "relatively marginal."

While the Congressional Budget Office estimates about 1 million more people are uninsured as a result of the repeal, "this by no means has had a major impact on insurers," she said.

"Premiums nationwide actually declined in 2019," she said.

The thing that has held the marketplace intact, she said, has been the tax credits and subsidies.

"If those went away, you'd see a major force on enrollment," she said. "People want insurance. And the reason people weren't able to get insurance prior to the Affordable Care Act was because of their inability to afford it.

"The individual mandate is important," she said. "But what we've seen is it is not critical to the function of the marketplace."

Still, observers continue to fear that drops in the number of people with health insurance will push insurance costs higher.

"Uncertainty in who will enroll leads to increased premiums -- insurers must assume that those who choose to drop insurance will be healthier -- leaving them to cover people that are less healthy and more expensive," said Steven Wagner, executive director of the Universal Health Care Action Network of Ohio.

"There are two major barriers that prevent people who are otherwise eligible from becoming covered: cost and bureaucracy. We see that both have a role in people dropping coverage in the marketplace; rising premiums and limited enrollment assistance are barriers that only those who are less healthy are motivated to climb over."

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