The ACA includes a weak coverage requirement that will encourage people to wait to purchase coverage until after they are sick, which unfairly penalizes those who currently have coverage.
A wide range of leading economists and health policy experts agree that enacting guarantee issue and community rating has severe unintended consequences unless they are paired with a strong commitment to achieve universal coverage through an effective and enforceable personal coverage requirement.
Studies show that states that have imposed guarantee-issue and rating reform laws in the absence of a personal coverage requirement have seen a rise in insurance premiums, a reduction of individual insurance enrollment and no significant decrease in the number of uninsured.
Studies from independent experts--the Congressional Budget Office (CBO), Center for American Progress (CAP), Urban Institute, Lewin Group, and RAND Corporation--have examined the impact of severing the individual mandate but retaining ACA market reforms. While the studies differ on the magnitude of the impact of severing the mandate, they all find that doing so would result in a dramatic rise in the uninsured population and increases in health insurance premiums compared to health reform with a mandate.
Experience in eight states that enacted various forms of guarantee issue and community rating in the 1990s all showed what happens when these market reforms are not linked to a mandate - higher premiums, no reduction in the uninsured and loss of consumer choice.
Milliman examined states that enacted guaranteed issue and community rating reforms in the absence of an individual mandate, and found that they saw their individual insurance markets deteriorate. This report updates Milliman’s August 2007 report on the impact of guaranteed issue and community rating (CR) reforms adopted in eight states in the 1990s.
AHIP filed a policy-oriented amicus brief in the US Court of Appeals for the 4th Circuit that reiterates our longstanding position that the guarantee issue and community rating provisions of the Affordable Care Act (ACA) are inextricably linked to the law’s personal coverage requirement. The decision in the District Court struck down the individual mandate, but left the market reforms in place—a situation which experience in the states has demonstrated would have severe unintended consequences for consumers.
Health plans today reiterated their strong support for new market rules and consumer protections to cover all Americans and guarantee coverage for pre-existing conditions. "Health insurance reform is an essential part of health care reform", said AHIP President and CEO Karen Ignagni.
Health plans today proposed guaranteed coverage for people with pre-existing medical conditions in conjunction with an enforceable individual coverage mandate.
A report by Milliman, Inc. examined the impact of enacting guarantee issue and community rating without covering everyone. According to the report, these initiatives have the potential to cause individuals to wait until they have health problems to buy insurance. This could cause premiums to increase for all policyholders, increasing the likelihood that lower-risk individuals leave the market, which could lead to further rate increases. If this continues, the pool or market could essentially collapse or shrink to include only the high-risk population.