The Facts About the Individual Mandate Repeal and the Increase in Premiums

Finally, millions of uninsured people no longer will face the threat of IRS tax penalties. For theoreticians who support the mandate, this may be bad news. Those at risk of tax penalties for making rational economic decisions not to buy costly policies they don’t want will take a different view.

Galen Institute

"It turns out sabotage might be overrated.

"A new study by the Center for American Progress argues Congress’s repeal of the individual mandate and a proposed Trump administration rule that would expand the sale and renewal of short-term policies will have a devastating effect on 2019 premiums.

"These acts of “sabotage” mean 40-year-old non-smokers will pay an average of $970 more in premiums in 2019, beyond the increases that would have occurred in their absence, according to the study.  The study then attempts to estimate rate increases by congressional district.  An earlier CAP study estimated statewide premium effects.

"Since rate increases have not yet been announced in most states, CAP estimates premiums will rise by an average of 16.4 percent in those states because of these two policies, on top of an underlying trend of 7 percent, for a total average 2019 premium increase of 23.4 percent.

"But a comparison of the CAP “sabotage” estimates with preliminary 2019 rate filings in cities in 17 states compiled by the Kaiser Family Foundation suggests CAP vastly overestimated the effects of these policy changes on premiums. In 13 of the 17 cities, total requested premium increases are less than the statewide increases CAP attributes to these policies. The table below compares the Kaiser data on the 17 cities with the statewide premium effects CAP ascribes to these two policies.

. . . 

For example, CAP predicts that repeal of the mandate and rules changes on short-term plans will increase average 2019 premiums in Colorado by 18.3 percent. But according to a Kaiser analysis of preliminary rate filings, premiums in Denver will rise by just 6 percent. That pattern held for all but four of the cities included in the Kaiser analysis.