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Health Aff (Millwood). 2019 Jan;38(1):147-154. doi: 10.1377/hlthaff.2018.05161.

Potential Effects Of Eliminating The Individual Mandate Penalty In California.

Author information

1
Vicki Fung ( vfung@mgh.harvard.edu ) is a senior scientist at the Mongan Institute Health Policy Center, Massachusetts General Hospital, and an assistant professor in the Department of Medicine at Harvard Medical School, both in Boston.
2
Catherine Y. Liang was a research assistant at the Mongan Institute Health Policy Center, Massachusetts General Hospital, at the time this work was completed. She is a master of public health student at the University of Toronto, in Ontario, Canada.
3
Julie Shi is an associate professor in the School of Economics, Peking University, in Beijing, China.
4
Veri Seo was a research assistant at the Mongan Institute Health Policy Center, Massachusetts General Hospital at the time this work was completed. She is an MD student at the George Washington University School of Medicine and Health Sciences, in Washington, D.C.
5
Lindsay Overhage is a research assistant at the Mongan Institute Health Policy Center, Massachusetts General Hospital.
6
William H. Dow is a professor in the Division of Health Policy and Management, School of Public Health, University of California Berkeley.
7
Alan M. Zaslavsky is the Daniel C. Tosteson Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School.
8
Bruce Fireman is a biostatistician in the Division of Research, Kaiser Permanente, in Oakland, California.
9
Stephen F. Derose is a research scientist in the Department of Research and Evaluation, Kaiser Permanente Southern California, in Pasadena.
10
Michael E. Chernew is the Leonard D. Schaeffer Professor of Health Policy in the Department of Health Care Policy, Harvard Medical School, and a research associate at the National Bureau of Economic Research (NBER), in Cambridge, Massachusetts.
11
Joseph P. Newhouse is the John D. MacArthur Professor of Health Policy and Management in the Department of Health Care Policy, Harvard Medical School, the Department of Health Policy and Management at the Harvard T. H. Chan School of Public Health, and the John F. Kennedy School of Government at Harvard University, and a faculty research fellow at NBER.
12
John Hsu is director of the Clinical Economics and Policy Analysis Program at the Mongan Institute Health Policy Center, Massachusetts General Hospital, and an associate professor in the Department of Medicine and the Department of Health Care Policy at Harvard Medical School.

Abstract

The tax penalty for noncompliance with the Affordable Care Act's individual mandate is to be eliminated starting in 2019. We investigated the potential impact of this change on enrollees' decisions to purchase insurance and on individual-market premiums. In a survey of enrollees in the individual market in California in 2017, 19 percent reported that they would not have purchased insurance had there been no penalty. We estimated that premiums would increase by 4-7 percent if these enrollees were not in the risk pool. The percentages of enrollees who would forgo insurance were higher among those with lower income and education, Hispanics, and those who had been uninsured in the prior year, relative to the comparison groups. Compared to older enrollees and those with two or more chronic conditions, respectively, younger enrollees and those with no chronic conditions were also more likely to say that they would not have purchased insurance. Eliminating the mandate penalty alone is unlikely to destabilize the California individual market but could erode coverage gains, especially among groups whose members have historically been less likely to be insured.

PMID:
30615517
DOI:
10.1377/hlthaff.2018.05161

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