Will Lack of Mandate Cause More Americans to go Without Health Insurance? A Contrary View

The tax cut passed by the Republican Administration includes the 2019 rollback of the “Individual Mandate” included in the Affordable Care Act.  Many healthcare policy wonks have predicted that the number of uninsured Americans will balloon by 13 million over the next 10 years due to the lack of penalty for not carrying health insurance.

It’s certainly logical that some people, mostly young folks, will drop health insurance coverage in 2019, as the cost of individual plans is prohibitive in many states. As a healthcare consultant to business, I’ve already heard stories of this phenomenon. While I do expect some people to go without coverage because there is no longer a penalty, I am of the opinion that overall health insurance enrollment will increase, not decrease in the one to five year term. My reasoning is based on a number of market changes I have already observed:

  • In Virginia, individual health plans not subject to ACA subsidies now cost about 50%more than comparable employer-sponsored group healthcare plans. This is sparking a movement back to group benefit plans by small employers.
  • The roaring economy has caused a surge in optimism among business owners and executives of all sized companies.  Improved financial results lead to new job creation and more covered workers.
  • Businesses with existing healthcare benefit plans are hiring new employees at a rapid pace. After a typical 30 or 60 day waiting period, these new workers will come onto company healthcare benefit plans… many for the first time.
  • When the labor market is tight and qualified workers are scarce, businesses have to offer better benefits packages to attract workers.
  • Smaller employers that may have dropped their healthcare plans during the great recession are now competing for employees, and I see them already restarting their health plans.
  • Start-up companies entering a competitive employment market are starting new healthcare plans to attract and keep their good employees.

I realize many will discount my observations as “trickle-down economics” comes to healthcare; or that it will only benefit business owners or already well-off workers.  I disagree and fail to see how these market forces will not benefit all Americans who are willing to work and enroll in health benefits.  I already see it happening.

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