As Senate Republicans move to repeal the Affordable Care Act's individual mandate as part of their tax bill, state officials worry that dropping this key element of Obamacare would lead to hundreds of thousands fewer insured Californians and ultimately to higher insurance costs.
"Eliminating that mandate means that health insurers really have no idea who’s in the risk pool," said state Insurance Commissioner Dave Jones. "But in all likelihood, it’s going to be sick people, which drives up their costs, which makes it less likely for them to continue to sell into these markets."
Premiums for 2018 are already locked in, but that’s not the case for health insurance costs in 2019, he said.
"It’s the individual mandate that helps make sure that you have a healthy risk pool," said Jones.
The mandate requires most Americans to have health insurance or face a tax penalty. The Congressional Budget Office has estimated that dropping the mandate would save the federal government $338 billion over 10 years -- money that it would have paid out as subsidies to help otherwise insured people pay their premiums.
In California, more than 1.1 million people receive premium subsidies.
"The hope is that the subsidies themselves make sure that healthy people continue to sign up," said Dylan Roby, an associate professor at the University of Maryland School of Public Health and a faculty affiliate at UCLA's Center for Health Policy Research.
"Right now, people perceive the individual mandate as a significant penalty and that draws them into Covered California, and if they heard that it went away completely then they would just sit it out and wouldn’t even bother shopping for insurance," he said.
The CBO estimates that if the mandate is eliminated, 22 million fewer people will have insurance nationally by 2026. In an April study, Covered California estimated 320,000 Californians would not be insured in 2018 without the mandate.
The study estimated the change could mean an additional 17.5 percent jump in premiums. Covered California says the report does not apply to 2019 numbers and it has not yet estimated how much ending the mandate now might drive up premiums.