Did the Massachusetts Individual Mandate Mitigate Adverse Selection?

This issue brief looks into Massachusetts health reform, pre- and post-ACA, and the role of the individual mandate in mitigating adverse selection. These data informed the calculation of total welfare gains or economic benefits of health reform.

According to the data, Massachusetts performed exceptionally well in terms of welfare gain and lowering the number of uninsured but only after the individual mandate was enacted. This suggests that adverse selection was indeed present prior to health reform in 2006.

Once the mandate was enacted, coverage in Massachusetts increased by 21.7 percent (up to 92% of total population) and 78 percent of this increase is attributed to the removal of adverse selection.