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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


Workable Alternatives to the Individual Mandate

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Question If the individual mandate fails in the courts, are there other options that would get similar results in terms of near universal coverage?

Answer: Nothing proposed so far would work as well as the mandate. Preliminary findings from the Congressional Budget Office show that eliminating the mandate would reduce the number of newly insured individuals from 32 million to 16 million. However, Jonathan Gruber -- an economics professor at the Massachusetts Institute of Technology who helped develop the reform law -- said removing the measure would have a larger effect, reducing that figure to eight million.

Two alternatives to the individual health insurance mandate would cover fewer individuals and would not lower costs substantially.

First Alternative

For CAP's analysis, Gruber examined an alternative to the mandate that would automatically enroll people in a health insurance plan and permit them to opt out. He found that the strategy would result in about 24 million newly insured U.S. residents. According to MedPage Today, the auto-enrollment option would cover fewer individuals than the individual mandate because fewer employers would offer health plans to workers if there was no coverage requirement. Gruber estimated that the cost of the strategy would be roughly the same as the cost of the individual mandate, because an estimated 80% of newly insured individuals would be automatically enrolled in Medicaid. In addition, he estimated that many young and healthy individuals would opt out of coverage, which would increase premiums by 11% in the non-group market.

Second Alternative

The second option for replacing the individual mandate is modeled after Medicare and would permit individuals to choose whether they purchase insurance, but force them to pay a penalty if they enroll after a certain date. Gruber estimated that around 12 million U.S. residents would gain coverage under this alternative. He estimated that premiums would increase by about 20% more than under the individual mandate because fewer healthy individuals would purchase insurance. However, he estimated that cost would be around 25% less than the mandate.

Conclusions

Gruber said, "The bottom line is there is no alternative to the individual mandate that gives us close to comparable results." He added, "They're not nearly as effective. They cost almost as much and they cover many fewer people while leading to much higher premiums for those who are insured".

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