WASHINGTON – Extending the Affordable Care Act’s March 31 open enrollment deadline has become a familiar plea from congressional Democrats frustrated with the poor performance of the federal insurance marketplace.
Republicans on Capitol Hill want to go even further and waive the health care law’s “individual mandate,” which requires most Americans to have coverage in 2014 or face a fine.
While both consumer-friendly fixes make for good politics, neither proposal is as simple or as smart as it sounds, according to experts.
The law’s open enrollment deadline and individual mandate are designed to help entice young, healthy people and those who are older and sicker into purchasing newly mandated coverage. The Obama administration and insurers are counting on that diversity of enrollees to help keep monthly premiums in check for individual plans sold on the state and federal marketplaces.
But waiving the mandate would be likely to cause premiums to rise because healthy people would avoid coverage, while sicker people would be more likely to take advantage of guaranteed access to coverage, regardless of current or past health problems. The law also bans premium variations based on gender, occupation or medical claims history and outlaws annual and lifetime benefit spending limits.
Delaying the mandate would also hurt the law’s goal of reducing the number of people without health coverage. The number of uninsured Americans would increase by 11 million in 2014 without the mandate, according to the Congressional Budget Office and the congressional Joint Committee on Taxation.
The 11 million uninsured would include 5 million fewer people who would otherwise receive coverage through Medicaid or the federal Children’s Health Insurance Program, 4 million who would otherwise have job-based coverage and about 2 million who would otherwise have individual coverage, according to the CBO.
Waiving the mandate would also undermine the work of 16 states, including New York, that have expanded Medicaid coverage and set up their own marketplaces, said Joel Ario, managing director at Manatt Health Solutions in New York. Those states did so with the understanding that the mandate would be enforced.
“You could imagine what those 16 states would say,” said Ario, who once coordinated development of health insurance exchanges at the U.S. Department of Health and Human Services. “‘We’ve done everything we’re supposed to do. We have the right to move forward. The mandate should function like it’s supposed to. The federal government is obligated to back it up.’”
Health insurers set their 2014 rates and based their plan offerings, in part, on the idea that they could expect a certain number of new enrollees by March 31. Expanding the time limit to purchase coverage could scuttle those estimates.