MIT Study: Average Premiums Would Increase By 27% If Individual Health Mandate Was Repealed

From the Center for American Progress' Wonk Room blog:

[T]oday, MIT Professor Jonathan Gruber has released a report that estimates how much more we would all be paying for health coverage, should conservative efforts to repeal the mandate and other parts of the health care law succeed:

Consider this:

Gruber writes that health reform is like a three-legged stool with insurance regulations, the mandate, and subsidies representing the separate legs. Remove one of these components and the stool (reform) falls apart.

Without the mandate, younger, healthier individuals won’t buy into the pool and insurers won’t be able to offer coverage at community rates or cover pre-existing conditions. Healthier individuals can wait until they become sick to purchase coverage, causing premiums for older individuals to skyrocket and further discouraging healthier ‘don’t need insurance yet’ Americans from purchasing insurance. The result is a death spiral “that leads only the sick to purchase insurance at very high prices.” Finally, to ensure that everyone is part of the system and can afford the community rates charged by insurers, the third leg offers subsidies to individuals and families up to 400% above the poverty line.

As Gruber concludes, “Critics who propose to “repeal and replace” the Affordable Care Act don’t seem to understand that all three legs of the stool are critical for reform. Pulling out any of the legs while leaving one or two intact will critically undercut gains from reform.”