The ACA Incentives People to Attain Health Insurance

Obamacare’s big stick doesn’t seem to be scaring many people into buying health insurance.

The health law includes many inducements for people to obtain health insurance — including free Medicaid coverage for many low-income Americans and subsidies for those with moderate incomes. But it also includes the notorious “individual mandate,” a fine for those who can afford insurance but don’t buy it.

Because the law, and the fine, are new, many policy experts expected that some people would decline to sign up for insurance until they were hit with a penalty at tax time. Forecasters have estimated a big bump in marketplace enrollment next year, the first sign-up period after people have been fined. The Congressional Budget Office, for example, estimates 10 million more people will have Obamacare plans next year. The law’s structure relies on even healthy and otherwise disinclined consumers to enter insurance markets to help stabilize prices.

Certainly, some people who might otherwise go uninsured have been persuaded by the penalty. Polls have shown that it is a well-known provision of the law. And studies of the uninsured have shown that mentioning the penalty changes some people’s thinking about health insurance. At the end of the normal enrollment period in February, about 11.7 million people had selected marketplace health plans or renewed their plans from 2014, according to the federal government.

But the Obama administration just conducted a small experiment into how much the penalty would affect the behavior of the remaining uninsured. And the results leave some experts concerned that next year’s sign-ups will come in below expectations.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary