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Health Care Reform:

Health Insurance & Affordable Care Act

How Supreme Court Rulings Could Impact Health Care

With All or Part of the Health Care Law Up in the Air, Experts Debate the Future of Health Care

What’s lost in this scenario?

Far fewer people would buy health insurance without the individual mandate. By some estimates, the number of uninsured Americans might only shrink by 8 million as opposed to the projected 32 million with the mandate in place.

In addition, there will be little incentive for healthy people to buy coverage since they can wait until they get sick to purchase insurance. That leaves mostly sick people in the insurance pool, and the cost of health insurance, as a result, is widely expected to rise.

Estimates of just how much costs could rise have varied. The Congressional Budget Office estimated a 10% to 20% rise in prices for plans sold on the state-based insurance exchanges. A recent RAND Corporation analysis found, however, that the cost for any individual could rise by only 2%.

There are also real-world examples, showing concern over high insurance prices without a mandate is more than theoretical. Experts point to states such as New Jersey and New York, where insurers are required to sell all customers a health plan, but no mandate to have insurance is in place. The result has been sky-high insurance costs that very few can afford. According to the Kaiser Family Foundation, in 2010 the monthly cost of an individual insurance policy was 69.3% higher in New Jersey than the nationwide average.

But proponents of the law argue there will be other incentives left in the health reform law to still entice people to buy insurance.

For instance, what these states didn’t put into effect -- that federal health reform will starting in 2014 -- is financial assistance to help people buy coverage. Federal subsidies will be available to a family of four with an income up to $92,200 annually to buy insurance through the exchanges. “When you have that financial assistance you’re not just bringing in the sick, you’re also bringing in the healthy, and so what that does is help moderate the dramatic effects we saw in New Jersey and New York,” Blumberg says.

If the mandate is overturned, there are also other ways to encourage  people to buy insurance that are being considered. One idea is to only allow people to buy insurance during a limited open-enrollment period. There would be late-enrollment penalties for anyone who delays. The thinking here is that people will realize they need to buy insurance when it's available, because it won't be as easy -- or as inexpensive -- to wait and buy insurance only when they get sick or injured.

“The individual mandate is a replaceable provision,” Wright says. “The question is whether there is the political will to do so.”

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