Starting in 2019, the Affordable Care Act's individual mandate penalty will be eliminated, effectively ending the law's requirement that most people have health insurance. While declines in coverage and increases in premiums are likely, the magnitudes of these effects are highly uncertain.
The new tax law eliminates the individual mandate. When this repeal takes effect in 2019, millions more Americans are expected to go without health insurance. Auto insurers will likely pick up the tab for some of that population's medical care. That could raise car insurance premiums.
The issue of how to improve health care in the United States is complicated. At a RAND event, senior economist and Paul O'Neill Alcoa Chair in Policy Analysis Christine Eibner discussed modifications to the Affordable Care Act and the long-term outlook for health care reform.
Americans expect affordable coverage for pre-existing conditions, access to routine services, and protection from unpredictable and significant financial risk from accidents or illness. As a product designed primarily for risk protection, insurance may not be the most efficient or affordable approach to achieving all of these objectives.
Despite their differences, the Affordable Care Act and the current proposals to replace it take a similar approach to providing health insurance. What might some alternatives look like? And how could they provide coverage to more Americans?
The American Health Care Act would guarantee that individuals with pre-existing conditions could enroll in insurance even if they had a coverage lapse. But there is no guarantee that this coverage would be affordable, and coverage of some essential health benefits could be excluded.
The American Health Care Act passed by the U.S. House of Representatives to repeal and replace the Affordable Care Act allows states to waive benefits that the ACA deemed “essential.” Dropping maternity care coverage, for example, would reduce premiums by 5 percent but increase out-of-pocket spending for new mothers.
Doctors recommend exclusive breastfeeding for the first six months of a baby's life. This provides health benefits to both mother and child and saves health care costs. Paid maternity leave can boost breastfeeding rates, but few U.S. firms offer it.
As Congress considers repealing and replacing the Affordable Care Act, it will need to consider how federal budget scoring can affect the fate of legislation. Depending on the ultimate cost of a replacement, finding enough savings to offset costs while maintaining budget neutrality could make it hard to pass a replacement.
Starting in 2019, the Medicare Access and CHIP Reauthorization Act will integrate and potentially simplify performance measurement by combining many measures and programs. Research provides insight into how to avoid pitfalls in MACRA's rollout.
A continuous coverage requirement is intended to discourage individuals from waiting until they become sick to purchase insurance. Such a requirement works well in theory to maintain a healthy marketplace, but there is little evidence on how well it might work in practice.