On Wednesday, the House passed bills to delay the employer as individual mandates, the latter as a matter of “fairness” (seriously, the bill is called the “Fairness for American Families Act”). I didn’t exactly veil my thoughts about this maneuver last week—I think my exact words involved “willful ignorance” and “political theatre”, but the full post is here.
I’m not the only one with thoughts threading in that direction. My attention was recently called to a letter signed by a cohort of academic heavyweights; any health wonk worth her salt should recognize about a dozen names (or more). They deftly capture both the imprudence of putting off the individual mandate and how utterly disconnected it is from the employer mandate. An excerpt of the letter follows (emphasis added, footnotes removed, full letter here).
Without the [individual] mandate, some people will choose to gamble or to free-ride, undermining the fairness and financial stability of the health insurance system … insurance reform without subsidies and mandates has consistently failed. In the five states that have tried comprehensive insurance market reform without an individual mandate, healthy people chose to stay out of insurance, sick people took it up, and premiums increased. Only broad participation in insurance markets can end the cycle of insecure coverage and high costs.
The Obama Administration’s recent decision to delay ACA’s requirement that large- and medium-sized employers sponsor coverage for their employees or pay a penalty is independent of the individual mandate. The employer assessment is designed to bolster the ACA’s financing and to ensure equity between large firms who do and do not provide insurance. This assessment will have only a very small impact on employers, since 97% of firms with more than 50 employees already offer insurance. The individual mandate stands in stark contrast, as nearly one in five non-elderly Americans is currently uninsured.
Delaying the employer assessment has almost no effect on the implementation of the ACA. The only important effect will be to raise one fewer year of revenue from this component of the law. In contrast, delaying the individual mandate would cut at the core of the vision of private-market based insurance market reform.
Requests to delay the individual mandate are really requests to gut the Affordable Care Act. Millions of Americans face immediate health care needs and financial challenges addressed by health reform. They cannot wait.
The Senate is not expected to pass either bill—and even if it did, the President has stated that he would veto both. Vetoing legislation that codifies the employer mandate delay seems counterintuitive, but Philip Klein suggests that signing such a bill “would be seen as a tacit acknowledgement that he acted outside of his authority by issuing a regulatory delay of the mandate.” I think he has a point, one that holds whether or not the Administration actually overstepped legal limits (here are the best critique and defense I’ve seen).
But, as the letter’s authors note, delaying the employer mandate is expected to have an extremely marginal effect on implementation and costs of the Affordable Care Act. Meanwhile, the Urban Institute anticipates that delaying the individual mandate would halve the number of people gaining coverage, with insurance attracting less healthy/more expensive enrollees. This isn’t idle speculation—Wednesday also brought news that nongroup insurance rates in New York are falling because the state has maintained stringent consumer protections without a mandate, resulting in some of the country’s highest premiums.
You don’t have to listen to me. The people who signed the letter include some of the most noted scholars in health economics and policy, and they haven’t minced words: we know better than to make this mistake on the national level._____________________________