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GAO Examines Alternatives to Individual Mandate

By Rebecca Adams, CQ HealthBeat Associate Editor

March 25, 2011 -- If the health care law's requirement for most individuals to buy insurance is struck down by the U.S. Supreme Court, other viable alternatives exist, the Government Accountability Office (GAO) says in a new report. But all of them involve tradeoffs or challenges.

The report outlines the pros and cons of each approach, but it does not estimate how much more or less effective each would be, when compared to the individual mandate.

Some experts have said that if the Supreme Court finds that the individual mandate to buy insurance is not constitutional, other alternatives could accomplish the same goal of expanding coverage.

The GAO report, which was requested by Democratic Sen. Ben Nelson of Nebraska, evaluated nine different approaches that also could encourage Americans to buy insurance.

In order for the new system created by the health care law to succeed, it is important that a large number of healthy people buy insurance so that the costs of coverage can be spread across the population. The law adds a number of new regulations for insurance so that people who have been sick or have pre-existing conditions can gain coverage. But if those patients are added to the coverage pool, premiums for everyone else in the program will go up unless more healthy people also join and subsidize the costs of providing care for the ill.

The American Cancer Society Cancer Action Network (ACS CAN), which supports the individual mandate, said in a statement that the GAO needs to do more work to determine the effectiveness of each approach in expanding coverage.

The mandate "has proven to be one of the more unpopular provisions in an imperfect bill, but by insuring that nearly all Americans have coverage, the provision will enable consumer out-of-pocket costs to stay within reasonable limits and ensure that the law's critical patient protections can remain in effect," said the statement. "Although the GAO report discusses alternatives to the individual responsibility provision, it provides little analysis showing that any of them would lead to equivalent, economically sustainable insurance coverage for the 32 million additional Americans who will be covered under the Affordable Care Act. ... Because of the weakness of the GAO findings, ACS CAN recommends that the GAO undertake additional analysis to assess whether any of these alternatives would result in quality, affordable coverage for as many Americans as would the individual responsibility provision."

The nine ideas that the report analyzed were proposals to:

  • Modify open enrollment periods and impose penalties for people who enroll late.
  • Expand employers' roles in auto-enrolling workers.
  • Conduct a public education and outreach campaign.
  • Provide broad access for personalized help with health coverage enrollment.
  • Impose a tax for all taxpayers to finance uncompensated care.
  • Allow greater variation in premium rates based on the age of enrollees. The health care law limits the difference in price that can be charged for people of different ages.
  • Condition the receipt of certain government services upon proof of insurance.
  • Use insurance brokers and agents differently so that they be paid a flat fee to help people enroll in coverage.
  • Require or encourage credit rating agencies to use insurance status as a factor in determining credit ratings.

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