AAA filed a ‘friend of the court’ brief on the challenges to the individual mandate in health care reform. Only one mistake that I saw, but first:
- Officially, the academy had no comment on whether the individual mandate is constitutional:
The Academy takes no position on the constitutionality of the individual-mandate provision, or on any of the other issues besides severability that are before the Court in the litigation concerning the Act.
- However, as a matter of actuarial science, repealing the individual mandate alone would create a hot mess.:
. . . [F]rom an actuarial perspective, a decision invalidating only the individual-mandate provision would impose an unsound regulatory regime on the American health-insurance market—a regime that Congress would not have intended.
- The reason, as we all know, is adverse selection. If you charge all risks the same rate, the best risks will drop out. Lather, rinse, repeat. The brief explains this in patient detail.
- So: If the Supremes toss out the individual mandate, actuarial principles would dictate they throw out guaranteed issue and community rating as well.
In the event the Court concludes that the individual-mandate provision is unconstitutional, it should reverse the judgment of the Eleventh Circuit to the extent it upheld the guaranteed-issue and community-rating provisions as severable.
The mistake – that uninsured growth is fastest among young adults. It’s actually slowest among them.
First, what the academy told the Supreme Court:
Young adults between the ages of 19 and 29 represent the largest and fastest-growing segment of the population without health insurance, and they are uninsured at almost twice the rate of adults between the ages of 30 and 64. See Namrata Kotwani & Marion Danis, Expanding The Current Health Care Reform Debate: Making The Case For Socio-Economic Interventions For Low Income Young Adults, 12 J. Health Care L. & Pol’y 17, 27-28 (2009).
The academy is quoting a 2009 study, but the situation has changed since then, as cited by Kaiser Family Foundation’s December 2011 brief (pdf) looking at Census data:
One exception to recent trends in private coverage is coverage for young adults (ages 19-25). Between 2009 and 2010, this group had an increase in private coverage, while all other age groups experienced a decline in private coverage (see Figure ES-2). [I’ve included the chart below.] The improvement in coverage for those ages 19 to 25 is most likely due to the provision of the Affordable Care Act that allowed young adults to stay on their parents’ insurance coverage as of September 2010.
The chart summarizes: