Scenario 2: Individual Mandate Struck Down
Meanwhile, a computer modeling study from RAND examined how the lack of an individual mandate would affect the number of people insured, premium costs in health insurance exchanges, and government spending on health coverage. Among the findings:
That's good news for HIX. According to the report, the premium increases will not be enough to "trigger catastrophic failure of the exchanges" because many enrollees will perceive "little or no change in their contribution even when premiums increase." That will reduce the chance of a "large scale exodus from the market."
The relative stability of the individual exchange market reflects federal exchange subsidies, which would keep some of the so-called young invincible in the market, and rate banding, which would provide some premium price stability even if older, sicker enrollees outnumber the younger, healthier members.
That's because without the individual mandate, fewer young and healthy individuals would purchase insurance. That means more of the newly insured would tend to be sicker and require more federal subsidies.
Taken together, the Urban Institute and RAND studies provide a good picture of how far-reaching the individual mandate really is. The Supreme Court may flip the switch on the individual mandate (and possibly) the ACA as early as June. All of us will live with the financial burden of that decision for years to come.