Study finds state-level individual mandates could insure more, decrease premiums

July 20--A new study has found state-level individual mandates would reduce the number of uninsured residents by nearly four million in 2019 -- West Virginia would be one of the four states with the largest percentage increases in coverage.

The study, released by the Commonwealth Fund and the Urban Institute, also said individual mandates could decrease premiums by 15 percent or more in West Virginia.

On average, premium costs would drop nationwide by nearly 12 percent, the study said, if every state joined Massachusetts and New Jersey in enacting state-level individual mandates.

These mandates would replace the Affordable Care Act's (ACA) penalty for not having health insurance, a fee that Congress eliminated, effective next year.

The ACA requires most Americans to enroll in an insurance plan or pay a financial penalty -- a move intended to stabilize insurance markets by encouraging healthy people to purchase and stay enrolled in a health plan. Now that the mandate penalty will be eliminated as of January 2019, the Congressional Budget Office predicts that premiums will increase and more people will lose their insurance coverage.

If states acted on their own to replace the federal mandate, the new report made the following findings:

--Millions more people would gain health insurance. Implementing state individual mandates across the country in 2019, when the federal penalties are lifted, would reduce the number of uninsured by 3.9 million -- a decrease of 11.4 percent. In 2022, there would be 7.5 million fewer uninsured Americans.

--Premiums would drop by an average of nearly 12 percent. If all states adopted an individual mandate, marketplace premiums would fall by an average of 11.8 percent. The impact would vary across states, depending on how many healthy people re-enroll in the marketplaces. The larger the share of healthy enrollees in individually purchased plans today, the greater the impact on premium rates. In New Mexico, premiums would decrease by more than 20 percent, and they would drop by 15 percent or more in Colorado, the District of Columbia, Kentucky, Nevada, North Dakota, Washington and West Virginia.

--Montana, West Virginia, North Dakota and Kentucky would see the largest uptakes, percentage-wise, in coverage. Mandates in these states would reduce the number of uninsured residents by more than 20 percent, as more people enroll in individually purchased plans, Medicaid, or the Children's Health Insurance Program (CHIP). In California, 389,000 people would gain coverage under a state mandate.

--Uncompensated care costs would decline dramatically. When patients are uninsured and can't pay their medical bills, state and federal governments, as well as physicians, hospitals and community health centers, absorb the costs of this uncompensated care. As more people gain coverage under state mandates, demand for uncompensated care would fall by $11.4 billion nationally, the new report finds. In Texas, uncompensated care costs would fall by $1.2 billion; in California, by $892 million; in Florida, by $747 million; and, in Georgia, by $548 million.

"Although the repeal of the individual mandate penalty will have negative effects across our health care system, states can act to keep their health insurance markets stable and affordable by offsetting the expected coverage losses and premium increases beginning in 2019," said Linda Blumberg, an author of the study and Institute Fellow in the Health Policy Center at the Urban Institute.

The report was also authored by Matthew Buettgens and John Holahan.

Email: [email protected] and follow on Twitter @WendyHoldren

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