Losing mandate could double health care law costs
Paul Clement, a lawyer for 26 states seeking to have the Patient Protection and Affordable Care Act tossed out in its entirety, leaves the Supreme Court in Washington, March 28, 2012, at the end of arguments regarding the health care law signed by President Obama. / AP Photo/Carolyn Kaster
(MoneyWatch) The federal government is fighting mightily to maintain the requirement, or "mandate," that everyone buy health insurance under the fledgling Affordable Care Act (ACA). A new Rand study reveals why. Without the mandate, the government's cost of providing health insurance under the 2010 health reform law will double, soaring from $3,659 for each newly insured individual to $7,468.
The cost of insurance for individual Americans would also rise, according to the study. But the increase is not as dramatic. Individuals buying insurance under the law would pay an average of $6,289 in premiums annually if the mandate were repealed, versus $5,755 if the mandate were to be upheld, according to the study.
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The Supreme Court is reviewing whether the federal government can demand that Americans buy insurance, a key component in the health care law. The decision, expected in June, could be pivotal to the law's survival. Without it, many claim that health insurers would go into a "death spiral" because another portion of the law requires that insurers "take all comers" -- in other words, you could not be turned away from buying coverage, no matter how sick you were when you applied for insurance. That could create a worst-case scenario for health insurers, allowing healthy individuals to drop their coverage, choosing to buy it only after they got sick.
The new Rand research looks at what would happen to the total cost of health coverage if the high court tosses out the individual mandate but affirms the rest of the law. The researchers note that some costs would not change, but the burden of payment would shift from one group to another. Current law already demands that hospitals and emergency rooms must provide help to those seeking "acute care," which means that the government (through medical aid programs for the poor) and hospitals already shoulder significant costs for the uninsured. Insured individuals also bear a portion of the load, too, because the cost of covering the uninsured is passed on through higher premiums for everyone.
In addition to doubling the government's cost of covering newly insured individuals, losing the mandate would likely cause some 4.8 million individuals who now have insurance to drop their coverage, according to Rand, a nonprofit policy research institution. A far smaller group of uninsured Americans would buy coverage without the mandate, the study says. Rand estimates that repealing the mandate will cause 12.5 million fewer individuals to gain coverage.
What do you think? Should the Supreme Court repeal or retain the mandate? Can the ACA survive without it? Should the law survive?
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The fact that employers pay the insurance premiums and write it off is part of the problem. It looks like a free benefit to people, so they don't care, until deductibles and copayments get their attention.
Health care costs are ruining this country. We can not compete when other countries have better, more efficient systems.
It is way past time that we deal with the high price for hospitals, doctors and drugs in this country. Half of the bankruptcies are caused by excessive health care bills.
Because owning a car is a choice.
I already pay over 10,000 a year just for myself. My wife's arthritis medicine is another 12,000 a year AFTER the wonderful insurance company pays their part.
Both of us are in excellent health aside from the arthritis.
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what part of unsustainable does anyone not understand? What part of gouge and rape does anyone not understand? Come to think of it I'll bet the policy doesn't cover rape.
What most of the protesters and Obamacare have missed is PRICE CONTROL!!! Till you have that, nothing in the insurance premium department will lower. It's just like going to a restaurant and choosing between chicken and lobster...the lobster is going to cost more at the restaurant because the price of the raw lobster is more than the price of the raw chicken and as such, is passed on to the consumer at a higher cost! The restaurant can't control the cost of chicken and lobster!
Unfortunately, I don't think that we will ever get lower pricing because we live in America and America is a capitalistic society where everyone wants to make more and more. Try telling a doctor that amasses tens of thousands of dollars in tuition debt and pays tens of thousands if not more in malpractice insurance that he should make less money by charging less. He'll tell you to go somewhere warm! Till you get the backing of the AMA for doctors and the similar associations for hospitals and pharmaceutical companies to lower pricing no insurance company can or will cut premiums because they have to pay the bills that are presented to them.
To aintfakin that posted the original comment regarding arthritis medication, wouldn't it be wiser to complain about the ridiculous cost of the medication and lambaste the makers and sellers of it than complain about the shortcomings of the insurance carrier? Think about it...you pay over $10,000 per year which is a lot of money for anyone to pay but if you get a critical illness, heart attack, stroke, cancer, the charges for these problems are anywhere from $100,000 to $1,000,000 so they will never be able to regain their money from you. This shortfall is then passed on to someone else in the form of a higher premium and so on and so on.
Price control is the missing key in all of this debate but will never happen organically and any politician trying to gain elected office won't dare take on the ones who really control the pricing because of fearing a loss of votes one way or another. Wake up consumers and start understanding the root cause of the problems we face and go after them, not the companies and industries charged with protecting us and paying bills they have no control over.
Ie, health care costs - it's been proven 'obamacare' will reduce the deficit. Mandated car insurance is somehow constitutional but health insurance not? why?
Proven by what? Obama expected the deficit to be cut in half by the end of his first term because of his stimulus package as well.
luadda22 nice try. Did you completely forget the republican filibusters in the Senate? There were enough votes to pass the Public Option, just not the super majority of sixty that the republicans always require with record numbers of filibusters. That is where the blame belongs!
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Wrong chooch, you are trying to blame Republicans by proxy. The public option was not and never will be a platform for the Republicans (and you can call them all the names you want), but the Dems had the majority in the House, the "super" majority in the Senate and the Presidency. If Reid and Pelosi couldn't get their own party to approve it when they had a chance, then why is it the other party's fault because they held the same beliefs as some in the Democratic party who wouldn't vote for it? Clean your own house first before you talk about the filth in someone elses.
Hey rafterman, do you know who finances all of those things in your feel good story? The middle class... I am not in the 1%, so I am financing it, you are, the mailman is, the plumber is. Someone has to pay for all the "free" stuff the government spreads around. It isn't "FREE" understand that ASAP as I am tired of liberals not understanding that the 1% does not finance these things. We 99%ers do in higher product and service prices. IDIOTS
States ("the government") requires everyone to buy insurance before you can register a car. And, man, you better not drive it without meeting that government mandate. Why is that OK with the Supreme Court? The greedy and despicable insurance industry can't have it both ways---on one hand paying off politicos to mandate by law that we buy over-priced auto insurance then fight the government mandate for health insurance.
We need to kick the greedy insurance industry out of our "health care" system once and for all. What we have now is Ins.GreedCare, not true health care.
Also auto insurance is only mandatory if you drive a car, an activity that is regualted and licensed by the state. If you do not drive, no insurance is required. With ACA there is no such option--the government curtails my libery by forcing me to by healthcare insurance--that should be my own decision. I do not expect the govt to care for me if I get sick either.
Had the administration done this then it would have prevented Congress from screwing with the funding because they and their families would have been uninsured along with thousands of government employees.
You can't have health care by the government while other government employees and Congress have different insurance programs. People will choose the best and least cost every time. It also cost more money to run different programs.
Either way you have to ensure that the mandate is there or you have no feasable health care unless you want to further burden tax payers who won't receive any benefit from this law.
The only reason people don't want the law is for some reason they think their paying for others or simply don't believe they should be burdened with an insurance payment when their completely healthy. The biggest reason and most selfish is that the wealthiest might actually have to stand in line like the rest of us to see the Doctor.
Some people wanted a single-payer plan, but Obama chose to push what he could get passed.