Eliminating the Individual Mandate

Effects on Premiums, Coverage, and Uncompensated Care

Under the ACA, most Americans will be required to be covered by health insurance or pay a penalty—the so-called individual mandate.

This report estimates the effects of the ACA and the individual mandate, as well as various levels of exchange participation, using a model that simulates decisions of individuals and businesses in response to policy changes.

Key Findings

  • Between 40 and 42 million would remain uninsured as opposed to 26 million with the mandate.

  • Private coverage would fall 11 million, covering 4 million fewer people than it would have without reform.

  • Uncompensated care spending would be much higher due to the increased number of uninsured.

  • Individual premiums in the health benefit exchanges would increase by 10 percent in a scenario assuming high exchange participation and by 25 percent with a low participation scenario.

  • Removing the mandate from the ACA while expanding Medicaid eligibility would decrease the number of people with private coverage by 3.6 million. Uncompensated care would increase by $20 billion.

This report was prepared by researchers at the Urban Institute as part of the Quick Strike Series.

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