What health insurance executives think of the GOP's plan to repeal the individual mandate

Though the debate continues over how much damage would result from repealing the individual mandate, health insurance leaders seem to be expecting the worst.

The Senate has passed a version of the GOP tax reform bill that would eliminate the individual mandate, and such a provision is expected to be in the final text of legislation agreed upon by both chambers of Congress. Republicans argue that axing the mandate will lift a burdensome government edict that is unpopular with consumers.

Yet of the 15 insurance companies that responded to a query about the effect of axing the individual mandate, all said it would lead them to raise prices and possibly cause some insurers to exit the individual market, according to an article from The Huffington Post.

Here’s a sampling of their comments:

  • Daniel Hilferty, CEO of Independence Blue Cross, said it’s critical to require people to have insurance, since those who buy coverage only when they need it, and then drop the policy, drive up costs for everyone.
  • John Baackes, the CEO of L.A. Care Health Plan, said the tax penalty for not getting insurance “does motivate people,” noting that his company saw a spike in enrollment when the fine rose from $95 to $695.
  • Jim Havens, senior vice president of individual and senior markets at Premera Blue Cross, predicted that eliminating the mandate will drive up premiums. That’s because healthy people will be the ones who decide to forgo insurance, leaving the risk pool mainly composed of people who “either intend to use it or think they will be using it,” he said.

Those comments are consistent with the position of the American Academy of Actuaries, America’s Health Insurance Plans, the American Hospital Association and other healthcare trade groups—all of which have warned against repealing the individual mandate.

The Congressional Budget Office has also estimated that eliminating the mandate would increase the number of uninsured by 13 million over a decade and hike premiums by about 10%.

Not all experts, though, are convinced the effects would be that bad. Standard & Poor’s analyst Deep Banerjee, for instance, projected that an individual mandate repeal would have more muted effects on coverage and premiums. The way he sees it, the mandate is a less powerful motivator for consumers than generous government subsidies.

And Avik Roy, a healthcare policy expert and previous adviser to Sen. Marco Rubio, R-Fla., predicted that the individual market would still be healthy even if the mandate is repealed. “It’s a weak mandate that has all sorts of loopholes,” he told The Wall Street Journal.