Local insurance experts say repeal of individual mandate likely to drive up costs

Photo: via MGN, file

Tucked inside the tax overhaul is a provision that ends the individual mandate, one of the central components of the Affordable Care Act of 2010.

To offset the cost of covering people with pre-existing conditions, Congress required most Americans to get health insurance.

To make insurance work, you need a balance of healthy people who won't use the insurance much to offset the high cost of the sicker people who will use the insurance more frequently. The more healthy people who are paying in, the cheaper the coverage will be for everyone.

To help achieve this balance, the ACA added the mandate that forced healthier people to participate, either by buying insurance or paying a tax penalty. The system never quite achieved balance. Insurers pulled out of many states, leaving some with an ever-shrinking pool of options for insurance from which to choose.

Local insurance brokers Eyewitness News polled said that removing the mandate will accelerate what's commonly referred to by critics as the "death spiral," wherein the people who comprise the insurance risk pools get older and sicker, and the cost continues to rise.

As the cost rises, that only further deters younger, healthier people from buying insurance.

"It's going to cause a rise in premiums across the board," said Bill Phelps, the chief of programs for Clinica Sierra Vista. "Not just for those people purchasing their insurance on the exchange, but those who have coverage through their employer, as well."

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