More Health Insurance Regs Without an Individual Mandate would Raise Health Costs

Bob Coli, MD, a physician in private practice and healthcare entrepreneur who is the founder, chairman, and CEO of the Diagnostic Information System Company, says any legislation mandating guaranteed issue will fail unless everyone is mandated into the system.

He adds it's hard for him to believe that "enacting new private insurer regulations (such as gender ratings and excluding pre-existing conditions), without an offsetting individual mandate, can avoid further increasing annual private health plan costs and premium increases and eliminate any ability to compete with a new public health plan option."

However, Marty Trussell, senior vice president of First Horizon Msaver in Overland Park, KS, a health savings account financial administrator, says an individual mandate without underwriting and pre-existing condition exclusions could conceptually work, but the reform would need a mechanism that "would allow carriers to underwrite those individuals who did not become insured during some designated enrollment window. Without this type of protection, the system would invite individuals to hold off on purchasing coverage until such time as they need it. This is sort of like selling someone an auto policy after they wrecked the car," Trussell says.

Though Obama has not been an outspoken supporter of an individual mandate, there is still good news for insurers and individual mandate supporters. The fact is that the individual mandate remains an important piece of the healthcare reform proposals on Capitol Hill.

It's true that the individual mandate is in every major reform proposal, but that doesn't mean it's going to happen. And with the president not making the idea a major part of his healthcare speeches, you have to wonder if Democrats will ultimately look to strip out that critical piece of reform, while adding new regulations, such as guaranteed issue.

That's something all health insurers should watch closely in Washington.

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