Health Insurance and You!

Ever since health reform was passed – specifically, the mandate that all individuals maintain health insurance coverage – policy experts have argued about whether the law was constitutional. Twenty-six states joined in against the individual mandate, and now, the decision seems to be headed to the Supreme Court. According to an article by Greg Stohr of Bloomberg, the Supreme Court may officially decide sometime this month to hear the case. If they do, the trial would take place in the first half of next year, with a ruling in June.

What’s being debated is not the entire law, however – just the individual mandate. Even if the Supreme Court deems it unconstitutional, the rest of the law would be left intact, including rules that prevent insurers from denying coverage to the sick and from raising premiums for people with preexisting health conditions. This scenario has insurers worried. To pay for care of the sick, insurers need premiums from the young and healthy people who would be required by the mandate to maintain coverage. But if the mandate is repealed, they’ll have to find a different way to make up those costs. If they try to do it by raising premiums, deductibles, or other customer expenses, healthy customers with less need of coverage would be driven away, forcing them to raise premiums again and causing a vicious cycle that insurers call adverse selection.

In addition, writes Mr. Stohr, “administrative officials, along with insurance companies, say that removing the mandate would undermine other provisions…[by destabilizing] the insurance market throughout the nation.” If the mandate is repealed, Congress would have to find other ways to encourage the young and healthy to buy insurance, such as tax incentives and reduced premiums during certain times. But whether these strategies would be as effective as a mandate remains to be seen.