Debate Over Delaying Individual Mandate Grows Louder

John Commins, November 12, 2013

The American Academy of Actuaries is warning that delaying the individual mandate could affect risk pools and claims in 2014 and beyond. Health plans say they cannot work without this key provision of the Patient Protection and Affordable Care Act.

Insurers and actuaries are warning that extending the enrollment period and delaying the individual mandate under the Affordable Care Act will create "potentially adverse consequences" for the law.

A letter to Congress [PDF] from the American Academy of Actuaries' Health Practice Council noted that the individual mandate and limited open enrollment period were included in the law to bring in a broad cross-section of risks—the young and the old, the healthy and the sick—to ensure the markets are viable and premiums are stable. The group said the approved premium rates for 2014 were based on the assumption that the individual mandate and limited open enrollment period would be in effect.

"If either provision is delayed, there would be an incentive for lower-cost individuals to delay purchasing coverage. If predominantly higher-cost individuals purchase coverage, 2014 premiums may not be adequate to cover that population's costs," the actuaries said.

"Further, as a result, the ACA risk-corridor mechanism would more likely be triggered and the U.S. Department of Health and Human Services would have to make payments to insurers if losses due to insufficient premiums exceeded a certain threshold."

John Commins

John Commins is a senior editor at HealthLeaders Media.

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