Kansas State University


Issues in Health Reform

Month: August 2013

Delay in employer mandate may not impact number of people insured nor costs

NEW STUDY by Rand verifies basic findings from Urban Institute report original July 18 posting as below, THOUGH it does point to a significant loss of federal income due to expected penalties not being collected.

“In July 2013, the Obama administration announced a one-year delay in enforcement of the Affordable Care Act’s (ACA) penalty on large employers that do not offer affordable health insurance coverage. To help policymakers understand the implications of this decision, RAND analysts employed the COMPARE microsimulation model to gauge the impact of the one-year delay of the so-called employer mandate. They found that the delay will not have a large impact on insurance coverage: Because relatively few firms and employees are affected, only 300,000 fewer people, or 0.2% of the population, will have access to insurance from their employer, and nearly all of these will get insurance from another source. However, a one-year delay in implementation of the mandate will result in $11 billion dollars less in federal inflows from employer penalties for that year. A full repeal of the employer mandate would cause revenue to fall by $149 billion over the next ten years (10% of the ACA’s spending offsets), providing substantially less money to pay for other components of the law. The bottom line: The one-year delay in the employer mandate will have relatively few consequences, primarily resulting in a relatively small one-year drop in revenue; however, a complete elimination of the mandate would have a large cumulative net cost, potentially removing a nontrivial revenue source that in turn funds the coverage provisions in the ACA.”

A report issued by the Urban Institute states that “The one-year delay in ObamaCare’s employer mandate won’t have much effect on the law’s costs nor the number of people it covers.”  The report summarizes though that a change in the individual mandate will have a significant impact.  Having a parallel delay in the implementation of the individual mandate is something currently being considered by Congressional Republications, though like their attempts at full repeal of the law, it is not destined for any traction.

The analysis in the report predicts a decline from 19% to only 15% without the individual mandate, down to 10% with the individual mandate.  Without the employer mandate this model predicts the number of uninsured to go to 10.2% uninsured rather than 10.1% with the mandate. That is, the difference with or without the employer mandate is pretty insignificant in terms of impacting the numbers of newly insured.


Why Obamacare is good for young adults

While we might disagree on whether or not The Affordable Care Act is the right way of making sure that more people are insured, most all agree that moving America toward full insurance of all of her residents is a laudable goal.  Making sure that young adults “play in the game” is therefore an important piece of making this happen. (Note: ACA is only for LEGAL residents.  Covering non-legals is not part of the plan.)

A thorough reflection on this issue is in this well written blog from the Wonk page on why young adults need to be insured:

“They will not be young and healthy — or even necessarily rich — forever. Young people grow old. Healthy people get sick. Rich people become poor. The people overpaying to keep costs low today are the people underpaying 10 or 20 years from now. It’s a terrible mistake to think of yourself as having a fixed relationship to the health-care system. Health needs, income, and demographic profile all change over time — and they can change unexpectedly.

Those young, healthy rich people will need a functional system in the future when they become older, sicker or poorer. So even for those least in need, health-insurance premiums are an investment — not in someone else’s future, but in their own. Only a cramped and narrow view of self-interest assumes that the status quo lasts forever. When it comes to health, change is inevitable. The only question is whether you’ll have insurance when it comes.”

To this I’d add at least one point…young adults are part of families….this impacts them both as family members themselves assuming that others are concerned for their welfare, as well as as individuals who care about a larger network of family members.  By their being “in the game” not only do they benefit now and in the future, but their loved ones do as well.  It has been expedient to believe that individuals exist apart from families but it does not serve our families nor our communities well.  For a good look at how thinking about families when we make policies consider our Wisconsin Extension colleague Karen Bogenschneider’s book, (2006). Family policy matters: How policymaking affects families and what professionals can do (2nd ed.). Mahwah, New Jersey: Erlbaum.