Monday, November 20, 2017

What Percentage of Americans Purchase Health Insurance Only Because of Individual Mandate?

With U.S. Senate Republicans leaning toward including a repeal of the Affordable Care Act's individual mandate in their upcoming tax bill, the question once again emerges of how much the mandate affects people's decisions whether or not to obtain health insurance. Should the mandate to have health insurance be repealed, some people who currently have insurance likely would drop it. Decisions of some individuals (presumably in good health) to drop coverage could well have implications beyond those individuals themselves. The fewer the healthy people in the insurance pool, after all, the less money available for insurers to pay the relatively expensive claims of less-healthy people.

But how many people actually would drop coverage if the mandate were to be repealed? According to a 2013 essay from conservative-libertarian group Freedom Works, "Forcing many of our citizens to buy expensive, unneeded and unwanted coverage, which, in turn, impairs every person's freedom to choose how they spend and use their money – [is] a total violation of our civil rights." One can only imagine health-insurance subscribers heading to the exits in droves to discontinue their coverage!

Well, as I learned this morning from a New York Times article on the ACA mandate-repeal aspect of the GOP tax plan, an October poll from the Kaiser Family Foundation examined this issue and the answer is... 7 percent. Quoting from the Times, "the nonpartisan Kaiser Family Foundation found that just 7 percent of people who buy insurance on the individual market said they would go without coverage if the mandate were no longer enforced." The direct link to the Kaiser report is here; Figure 10 is where to look.

All the usual cautions about interpreting polls apply here. One in particular is that, whereas the full poll sample of roughly 2,500 has a narrow margin of error of +/- 2%, the subgroups of respondents for whom the question about dropping coverage is most relevant (i.e., those who bought their coverage via the ACA marketplaces or through all types of non-group-employer plans) have margins of error of +/- 9 and +/- 7, respectively (Kaiser methodology report).

The proportion of Americans who buy their health insurance on the ACA exchanges and who would drop this coverage if the individual mandate were lifted may thus actually be higher than 7%. It will still be a small minority of ACA customers.

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