The individual health insurance coverage mandate is such a vital component of the year-old health reform law that, if removed, alternatives would be needed, according to the American Academy of Actuaries.
The AAA made that conclusion in a Government Accountability Office report released this week and  said that the mandate serves to help attract low-risk individuals, which is necessary to prevent adverse selection to keep the health insurance markets viable.
“To make the provisions that restrict rating and eliminate exclusions for pre-existing conditions work, health insurance markets must attract a balanced cross-section of risks,” said Cori Uccello, senior health fellow for the American Academy of Actuaries. “This means finding a way to encourage the enrollment of low-risk individuals. The individual coverage mandate may be the best tool available to achieve that.”
Uccello said that GAO report provides a significant examination of possible alternatives to the mandate if it is declared unconstitutional or repealed through legislative efforts.
Uccello said some of these alternatives should be explored as possible methods to strengthen and improve the mandate even if it is not eliminated.
Alternatives include:
•·       late-enrollment penalties
•·       increasing the time between open-enrollment periods
•·       auto-enrollment features
•·       limiting the ability to upgrade to more generous benefit plans during open enrollment
The GAO report is available at: http://www.gao.gov/new.items/d11392r.pdf.
