“They also tend to be relatively healthy, as they don’t smoke, don’t do dangerous things, exercise, and eat sensibly,” he said. “With rate bands and guaranteed issue and subsidies, a lot of favorable selection could occur’enough, perhaps, to offset, at least in part, the much feared phenomenon of ‘wait until you are sick and then buy insurance.’”
Conservative critics, on the other hand, say the Obama administration — or a successor — will have to either jettison the guaranteed issue and community rating provisions or slow-walk their enactment. ’They will be working as hard as they can to find the authority that allows Health and Human Services to slow down turning the screws on the insurance industry,’ said Joseph Antos, a former HHS official who is now the top health care scholar at the American Enterprise Institute. ’They’ve got to make it possible for insurers to actually enroll people in 2014.’
But HHS could take a third path to maintain both guaranteed issue and community rating: creating carrots and sticks to get people to sign up for coverage that will have almost the same effect as a mandate. For instance, the government could establish a brief open enrollment period each year — similar to the window that most people get from their employers each year for changing plans. That would make waiting until for an accident or grave illness strikes a much more risky proposition.
Another option would be higher premiums for people who wait before obtaining coverage. Medicare does that already with the premiums for Part B or physician services. “If the individual mandate and nothing else is struck down, the Obama administration would aggressively pursue alternative solutions to make the risk pools work,” said Dan Mendelson, chief executive officer of Avalere Health, a health care consulting group.
Finally, if there is a change in administration after the mandate is struck down, a new Republican administration could give more flexibility to the states as they move to set up exchanges where insurance policies will be sold. Former Massachusetts Gov. Mitt Romney, architect of the state plan that the Democrats used as a model for Obamacare, has promised to issue 50 state waivers from the coverage requirements in the law.
There is already at least one model for what might happen, at least on Republican-run states. Though it gets far less press than the Massachusetts exchange set up under Romney, Utah set up an exchange that allows for high-deductible plans, which provide less coverage, are usually cheaper and require enrollees to pay more out-of-pocket for routine coverage.
“Many states will want to experiment with more limited exchange products such as that deployed in Utah,” said Mendelson. “A Romney administration could deploy that flexibility to help Republican governors who want to do something to reduce the ranks of the uninsured in the context of a private market solution.”