Health insurers and supporters of the Obama administration's health-care reform law are currently in the midst of drawing up possible contingency plans in case the Supreme Court overturns the Affordable Care Act's individual mandate.
The insurance industry argues that premiums are likely to skyrocket without the individual mandate in place to aid in pushing millions of new enrollees into the marketplace, as healthy people will be less likely to buy insurance, while insurers will still be required to sell policies to all applicants. In fact, a repeal of the individual mandate would increase insurance premiums by 25 percent, according to a study released by the Robert Wood Johnson Foundation.
"The insurance reforms would have to change if the mandate were struck," said Justine Handelman, vice president of legislative and regulatory policy for the Blue Cross and Blue Shield Association trade group.
Health-insurance officials say that if the mandate is repealed, "their first priority would be persuading members of Congress to repeal two of the law's major insurance changes: a requirement to cover everyone regardless of his or her medical history, and limits on how much insurers can vary premiums based on age." Their next step would be to "set rewards for people who purchase insurance voluntarily and sanction those who don't."
Other possible alternatives to the individual mandate that insurers are weighing:
- Penalize those who enroll outside of short annual windows; deny treatment for specific conditions, especially right after a policy is purchased
- Reward certain insurance buyers, such as offering much lower premiums for younger and healthier people
- Expand employers' role in automatically enrolling employees for health insurance
- Urge credit-rating firms to use health-insurance status as a factor in determining individuals' ratings
Although the mandate has been upheld in two appeals courts, it was struck down in a third. The Supreme Court hearings are scheduled to begin March 26, and an official ruling is expected to be delivered in June.