In the wake of the Obama administration’s decision to delay an Affordable Care Act requirement that large employers who don’t provide insurance to their workers pay a fine, several prominent conservatives — including House Speaker John Boehner (R-OH) — have been pushing a similar delay for the individual mandate, too. But unlike the employer mandate, the individual mandate is critical to the functioning of the overall law. Republicans’ calls to delay it would only increase the ranks of uninsured Americans while raising insurance premiums for millions.
After businesses warned they wouldn’t be able to comply with the employer mandate’s administrative requirements in time for 2014, the administration decided to delay it for one year. That’s led congressional Republicans to proclaim the health care law unworkable, and recent reports suggest that Boehner will bring up a floor vote to delay the implementation of the individual mandate, too.
“Is it fair for the president of the United States to give American businesses an exemption from his health care law’s mandate without giving the same exemption to the rest of America? Hell no, it’s not fair,” Boehner told House Republicans on Tuesday. “We should be thinking about giving the rest of America the same exemption that Obama last week gave businesses.”
But Boehner’s rhetoric is predicated on a false equivalency. Since the vast majority of large American businesses already comply with the ACA’s insurance coverage requirements, the employer mandate actually only affects about 10,000 businesses and one percent of the U.S. workforce.
By contrast, the individual mandate applies to every uninsured American (with exceptions for those who can’t afford coverage or don’t have options available to them). If it is delayed, the Americans who would most likely put off getting insurance for another year are the very people whom the law needs to join the insurance pools to keep everyone else’s costs down — the young and the healthy. Without the mandate, it could also be possible for people to buy insurance when they need it and drop it when they don’t, since Obamacare also bans insurers’ ability to deny coverage based on a pre-existing condition.
That’s why the Congressional Budget Office (CBO) estimates that repealing the mandate entirely would raise premiums in the individual market by 15 to 20 percent and increase the number of uninsured Americans by 16 million. While a one-year delay wouldn’t have quite as big of an effect as a total repeal, it would still raise premiums during a critical stage of the law’s implementation — and potentially confound insurers by creating uncertainty over what rates they should be charging.
In fact, conservative health policy experts have themselves ceded this point in the past. Ardent Obamacare critic Avik Roy called nixing the individual mandate a “terrible idea” in a 2011 column for the conservative National Review, noting that it would “destabilize the insurance market” and “drive insurers out of business.”
In a separate column for Forbes, Roy also recalled the experience that Kentucky had in 1994 when the state implemented a ban on denying coverage based on pre-existing conditions without an accompanying mandate. The result? Within just two years of enactment, “60 insurers had exited the state,” out-of-pocket expenses “rose above what they had been in pre-reform days, and average premiums jumped between 36 and 165 percent.”