As Senate Republicans crafted a “skinny repeal” bill behind closed doors on Thursday, prominent healthcare industry groups warned against the repercussions of repealing the Affordable Care Act’s coverage mandates without a viable replacement.
The skinny repeal concept, which the GOP turned to after two failed votes on more comprehensive repeal bills, would roll back the ACA’s individual mandate, the employer mandate and a tax on medical devices.
But in a letter sent to Senate leaders on Thursday, America’s Health Insurance Plans President and CEO Marilyn Tavenner wrote that “targeted proposals that would eliminate key elements of current law without new stabilizing solutions” would make problems in the individual markets—including rising premiums and insurer exits—even worse.
“We would oppose an approach that eliminates the individual coverage requirement, does not offer alternative continuous coverage solutions and does not include measures to immediately stabilize the individual market,” Tavenner said.
Getting rid of the mandate to obtain coverage “only exacerbates” the affordability problem that ACA critics want to fix, said David O. Barbe, M.D., president of the American Medical Association. Instead, it would lead to adverse selection, causing premiums to rise and the individual market to destabilize, he said.
Here's why: The individual mandate is one leg of a three-legged stool supporting the ACA’s individual market reforms. The other two legs—guaranteed issue and community rating—ban insurers from denying coverage to individuals or charging higher premiums, respectively, based on health status.
Keeping both of those provisions requires some mechanism like the individual mandate to ensure a balanced and large enough risk pool. Without such a mechanism, people could simply buy coverage whenever they need it, leading to a sicker risk pool that necessitates higher premiums—and possibly even the collapse of the market.
Indeed, if people are allowed to purchase coverage only when they need it, the Blue Cross Blue Shield Association said in a statement on Wednesday, that “drives up costs for everyone.”
Absent the individual mandate, “it is critical that any legislation include strong incentives for people to obtain health insurance and keep it year-round,” the group said.
A Congressional Budget Office analysis, made on the request of Senate Democrats based on their understanding of the bill, estimated that such a measure would increase the number of uninsured by 16 million as of 2026.