Removal of the health insurance mandate could impact our larger health care system

Removal of the health insurance mandate could impact our larger health care system
© Greg Nash

We begin 2018 with a major change settling into the health-care industry: The removal of the individual mandate, which required all Americans to acquire health insurance coverage or risk paying a penalty.

Late last year, Congress passed the Tax Cuts and Jobs Act and made a major change to the health-care industry in the process. The original thinking behind the controversial mandate was that the larger health insurance market would be best served if everyone — young and old, sick and well — paid into the system. But in the absence of a requirement to that end, what happens next?

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At this stage, it’s important for the health-care industry as a whole to talk about these changes and start to come to some consensus about them. Health-care providers will need to be on the same page as we move on to determine what can be done as an industry to mitigate the impacts of this change, and to fill the gaps in health care that it may well create.

 

First, it’s important to understand that the ripple effects of removing the individual mandate are likely to touch everyone. The first and most noticeable impact will most likely be in the form of cost.

The Congressional Budget Office estimates that repealing the mandate will increase health insurance premiums by 10 percent – and add 13 million people to the rosters of the uninsured by 2027.

More uninsured Americans will lead to more visits to the emergency room, in part because no one is turned away there: a federal law requires that anyone who visits an ER must be treated, regardless of their insurance status or ability to pay.

A recent study from the University of Maryland School of Medicine found that nearly half of U.S. medical care already comes from emergency rooms — and a different study, from the New England Healthcare Institute, concluded that the overuse of U.S. emergency departments (especially for non-urgent matters) results in $38 billion in wasteful spending each year. We can expect that inefficient spending to go up.

Meanwhile, a health care provider’s knowledge about their patient’s health histories and opportunities to educate them about preventative care will go down.

I am an advocate of encouraging patient accountability. This means that people should be educated about their own health and the best ways to sustain it. They should regularly stop in for preventative screenings to catch treatable diseases before they worsen and they should learn about how to keep chronic conditions in check.

The Affordable Care Act (ACA) has made several changes designed to make it easy for people to take charge of their health in these ways.

To provide just one example, under the ACA many preventative health screenings now must be covered by insurers because regular use of screenings has been shown to save lives and money.

The U.S. Office of the Surgeon General reports that $3.7 billion in medical costs could be saved in the U.S. each year if preventative screenings increased by 90 percent. Use of these screenings is, unsurprisingly, already very low among the uninsured.

The decline of regular doctors visits and screenings also has the potential to make providers’ jobs more difficult; without regular check-ins with patients, they’ll have less information to go on when making treatments decisions.

In November 2017, the American Hospital Association was among a list of signatories on an open letter to Congress asking them not to dispense with the individual mandate, warning that “there will be serious consequences if Congress simply repeals the mandate while leaving the insurance reforms in place: millions more will be uninsured or face higher premiums, challenging their ability to access the care they need.”

Though mention of the individual mandate comprised only two sentences of the tax bill, the implications of the individual mandate repeal are significant. The mandate was an important underpinning of a health-care market as envisioned by the ACA, and we should keep close watch on the changes that arise in its absence.

Karen Schechter is the director and assistant professor of the health-care management and health administration programs at Maryville University. She is also the owner and senior health care advisor of Schechter Healthcare Advisors, LLC, which provides physicians and hospitals with practical solutions to address the ever-changing health-care environment.