Nobody looks forward to seeing a doctor, but we may soon have even more reason to put off going. Recently, a new Rand report shows that repealing the act could be very expensive for the average American.The group of economists that worked on the report are concerned that if the Supreme Court rules that the government cannot legally force citizens to buy health insurance then this will induce people who are healthier and require less coverage to opt out of insurance all together.
This is bad news for those who do decide to buy health insurance anyway because the insurance companies will need to raise premiums to make up for the lost revenue from those who opted out. This phenomenon, known as adverse selection, is the same reasoning for mandating auto insurance.
The committee predicts that with the mandate in place the average annual premiums paid will be $5,755 compared to $6,289 if it is repealed. This is a 9.3% increase for the average taxpayer. However, the report does point out that some of this change is caused by a change in the age composition of enrollees and does not completely reflect an increase in every individuals premium.
As we saw before the cost of healthcare for Americans actually decreases overall when the poor have insurance. The average healthcare costs for the participants dropped from $8,899 in the first year to $4,569 in the last year of the study. This is important to note because without insurance some of the burden for paying the $8,899 for each participant would fall on the taxpayers.
All is not lost for high risk individuals, though, if the ACA is shot down by the Supreme Court. As we pointed out before, “If the federal law is struck down, some state officials are considering taking the patients into their own, separate, state high-risk insurance pools.”