Now that the Supreme Court has blessed the individual mandate in President Obama’s health care law requiring people to buy health insurance, Politico reports that health insurers are urging the Department of Health and Human Services to strengthen the mandate.
“It wasn’t to be mean to people — it was supposed to pull in enough healthy customers to help pay for all the sick people who will get coverage… Here’s the catch: The individual mandate penalties will be pretty weak as they are phased in over two years — only $95 when they start in 2014, much less than it costs to buy insurance. And yet, everyone with pre-existing conditions will have to be accepted for coverage right away.”
“They want more incentives — such as a late enrollment fee — to get healthy people to sign up quickly. Without getting the healthy folks in, the fear is that everyone’s health insurance premiums could shoot through the roof when all those sick people get their coverage.”
“When the mandate is at full strength in 2016, people will pay $695 or 2.5 percent of their income, whichever is greater.”
Avik Roy: “It’s not clear that HHS has the power to strengthen the individual mandate on its own. Any attempt to do so would likely face a lawsuit. And there’s a far better approach, that might make both sides happy: repeal the individual mandate and replace it with these alternative provisions, like limited open-enrollment periods.”