Joe Antos: The Individual Mandate Won’t Save Obamacare

For all the talk about the Affordable Care Act’s mandate to purchase insurance, you might think that the mandate is the linchpin of the entire law. It isn’t, at least from the standpoint of whether the insurance market will collapse without it. Even with the mandate, the ACA is likely to cause widespread and unnecessary disruption that will drive up the cost of insurance for the very people that the law is supposed to help.

In arguments before the Supreme Court two weeks ago, both the Administration and opponents of the law agreed that the major insurance market reforms could not function without the mandate. The ACA requires insurers to offer coverage to all comers, regardless of their health status. Moreover, insurers are not allowed to exclude from coverage expenses for pre-existing conditions, and they are not allowed to charge higher premiums to people with those conditions. Unless you force young, healthy people to purchase health insurance, the cost of coverage will soar as the sick buy insurance and the healthy wait to buy until they really need it.

That is correct, as far as it goes. We have plenty of evidence that guaranteed issue and community rating imposed by the ACA would, by themselves, cause the market for individual coverage to melt down. But the mandate is no cure.

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