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Eliminating healthcare reform’s insurance mandate could have unintended consequences

As you might suspect, eliminating the healthcare reform law’s requirement for Americans to purchase insurance could increase the number of uninsured patients in your practice, according to the results of a report released by the Rand Corp. Eliminating the insurance mandate, however, would not dramatically increase the cost of buying policies through new insurance exchanges, and neither would it cause total government spending on healthcare to spike, the authors predict.

The study comes as the U.S. Supreme Court prepares to hear arguments in March regarding the constitutionality of the individual mandate, a provision of 2010’s Patient Protection and Affordable Care Act.

The number of Americans predicted to obtain coverage in 2016 under the act would drop to 15 million if the mandate were eliminated, according to estimates using a microsimulation model created by the Rand Comprehensive Assessment of Reform Efforts (COMPARE) program. The model predicts that 27 million Americans will obtain coverage if the mandate remains.

Despite that drop, RAND estimates that eliminating the individual mandate would increase an individual’s cost of buying insurance through the individual exchanges by just 2.4%.

Overall government spending wouldn't change much with or without the mandate, but spending per newly insured individual would double without a mandate because mostly sicker, higher-risk Americans would purchase insurance, according to Rand.

“Our analysis suggests eliminating the individual mandate would sharply decrease coverage, but it would not send premiums into a ‘death spiral’ that would make health insurance unaffordable to those who do not qualify for government subsidies,” said Christine Eibner, the report’s lead author and an economist at Rand, in a statement.

Several other research groups have studied what might occur if the individual mandate were eliminated. The Rand report predicts dips in overall insurance coverage and changes in government spending similar to those predicted by the earlier studies.

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