HealthLeaders Media interviewed L.A. Care CEO John Baackes about the impact of repealing the Affordable Care Act (ACA) individual mandate in "Insurers Facing Impossible Scenario: Cover Everyone, But No Individual Mandate."
As the House and Senate work on the final version of the tax reform bill, a major concern is that the Senate's proposal to end the tax penalties associated with the ACA's individual mandate will remain. Baackes told HealthLeaders that the individual mandate is the one brake stopping the healthcare system from rolling back to the pre-ACA days.
"There is no question that the penalties associated with the ACA's individual mandate motivated people to enter the marketplace. Enrollment here at L.A. Care more than doubled when the minimum penalty rose to $695 last year. Without a penalty, the motivation to buy in is gone, and younger, healthier people are more likely to drop out," he says. "Those who stay in the market will have to pay more. But really, everyone is going to pay more. There's no way around it."
The end of penalties will mean a return to the old system of more consumers turning to the ER for services, and the resulting high-cost care will be another reason for all providers to raise premiums, Baackes said. Some health plans will find that they just can't be profitable under those conditions.
"As a not-for-profit entity, L.A. Care will be among the last ones standing as it is part of our mission to provide health coverage to the most vulnerable communities," Baackes says. "But an end to the mandate penalties would certainly begin the death spiral of the ACA."
The article shared his explanation that the ACA addressed the problem of unaffordability for individuals with preexisting conditions through its "guaranteed-issue" and "community-rating" provisions. Together, they prohibit insurance companies from denying coverage to these individuals or charging them higher premiums based on their health status.
About L.A. Care Health Plan
L.A. Care Health Plan is a public entity and community-accountable health plan serving residents of Los Angeles County through a variety of health coverage programs including L.A. Care Covered™, Medi-Cal, L.A. Care Cal MediConnect Plan and PASC-SEIU Homecare Workers Health Care Plan. L.A. Care is a leader in developing new programs through innovative partnerships designed to provide health coverage to vulnerable populations and to support the safety net. With more than 2 million members, L.A. Care is the nation’s largest publicly operated health plan.