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CRS paper examines individual mandate provision

Posted on July 10, 2012 | No Comments

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Implementation Briefs

The Congressional Research Service (CRS) recently issued an updated report on the requirements and penalties associated with the Affordable Care Act’s (ACA’s) minimum coverage provision. The report examines the amount of the penalties that families and individuals must pay if they choose not to buy health insurance, the affordability provisions and exemptions to the penalty, and the information reporting requirements. The report also details what information must be provided to consumers beginning in 2013, the information needed about the individual mandate, the information that must be provided on employees’ W-2 forms, and information about the certification of exemptions provided by health insurance exchanges.

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A table compiled by the Urban Institute succinctly summarizes the drastically different impacts of delaying the employer and individual mandates. Ultimately, delaying the employer mandate until 2015 will have little impact on uninsured numbers, premium rates, and the financial stability of hospitals that offer a disproportionately high quantity of uncompensated care. Delaying the individual mandate, however, would negatively impact the insurance market by substantially raising premium prices and harming disproportionate share hospitals.
The minimum coverage provision, or individual mandate, is a provision under the 2010 Affordable Care Act (ACA). According to a short paper recently issued by The Robert Wood Johnson Foundation and the Urban Institute, if the ACA were in effect today, 94 percent of the total population (93% of the nonelderly population) or 250.3 million people out of 268.8 million—would not face a requirement to newly purchase insurance or pay a fine. In this brief, the authors use the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM) to estimate the number and share of Americans potentially subject to the mandate, identify their insurance status absent the ACA, and simulate eligibility for Medicaid and exchange-based premium and cost-sharing subsidies. To allow the most direct comparison of postreform coverage with coverage absent reform, their analysis treats the provisions of the ACA as if fully implemented in 2011. The results of their analysis are presented in a table format—with estimates of the population exempt from the mandate; the population potentially affected by the mandate but already covered by insurance of some type; and the remaining population required to newly purchase coverage or pay a fine.
Today the Robert Wood Johnson Foundation (RWJF) released a report authored by researchers from the Urban Institute called "Eliminating the Individual Mandate: Effects on Premiums, Coverage, and Uncompensated Care: Timely Analysis of Immediate Health Policy Issues." The report examines the effect that eliminating the individual mandate—the requirement for most Americans to have health insurance or face a penalty—would have on health insurance coverage, spending, premiums and uncompensated care. Using the Urban Institute’s Health Insurance Policy Simulation Model, the researchers simulated the Affordable Care Act as enacted, as well as several alternative scenarios of health reform without the mandate. The authors find that without the mandate: 1) Between 40 and 42 million would remain uninsured as opposed to 26 million with the mandate; 2) Private coverage would fall 11 million, covering 4 million fewer people than it would have without reform; 3) Uncompensated care spending would be much higher due to the increased number of uninsured; and 4) Individual premiums in the health benefit exchanges would increase by 10 percent in a scenario assuming high exchange participation, and by 25 percent with a low participation scenario.
The Congressional Research Service (CRS) has released a report on the individual requirement to purchase health insurance (individual mandate) under the Affordable Care Act (ACA). The report, "Individual Mandate and Related Information Requirements under PPACA," lays out the various exemptions granted from the individual mandate provisions under the law, as well as explains how enforcement of the mandate by the IRS will work once the mandate takes effect in 2014.

The U.S. Government Accountability Office (GAO) has issued a report that examines ways to encourage individuals to voluntarily obtain health insurance. GAO was asked by Congress to undertake the report due to the chance "...that legislative or judicial action could result in a change to, or elimination of, the mandate..." and the report is based on multiple interviews from experts regarding alternative approaches to the individual mandate to purchase health insurance under the Affordable Care Act (ACA).

The Supreme Court handed down its long-awaited ruling in the case of National Federation of Independent Businesses et al. v. Sebelius, Secretary of Health and Human Services, et al., upholding the individual requirement to maintain insurance coverage as a reasonable exercise of Congress’s taxing and spending authority and also upholding the constitutionality of the Medicaid coverage expansion. In a surprise coalition, Chief Justice Roberts was joined in his majority opinion by Justices Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan. The summary below describes the majority opinion, the concurring opinion (authored by Justice Ginsburg), and the dissenting opinion (written by Justice Scalia). Because the Court upheld the individual mandate, it never reached...