Cost and Coverage: The Impact of Implementing Various State Health Care Reform Proposals Nationally. A National Individual Mandate


ASPE worked with The Lewin Group to design and model a national individual mandate for the purchase of health insurance.  The key design elements of the model include:

  • Premium subsidies – full premium subsidies are available to those below 150% FPL, while availability of premium subsidies for those with incomes between 150% and 300% FPL is on a sliding scale basis with the subsidy decreasing as income increases (same as outlined for the Health Insurance Premium Subsidy Programs section);
  • Mandate exemption – Individuals and families with incomes above 300% FPL would be exempt from the mandate if their premiums would exceed a certain percent of their income, as outlined in the following table:
    Income as Percent of FPL Premium as Percent of Income
    300% - 350% 5.5%
    350% - 400% 6.5%
    400% - 500% 7.5%
    500% - 600% 8.6%
    Above 600% No exemption
  • Insurance market reforms – guaranteed issue is required for all insurers, and premiums cannot vary by health status; and
  • Crowd out – to prevent the substitution of private coverage for public coverage, individuals must be without insurance for 6 months or longer to be eligible for the subsidy program.

Several design specifications were varied to produce a series of coverage and cost estimates.  Consistently using the above four design elements, The Lewin Group modeled the individual mandate with the following five variations on enforcement mechanisms:

  • Penalty – mimicking the Massachusetts program, individuals who do not obtain coverage are subject to a penalty equal to one half the cost of insurance under the minimum standard plan (same as the minimum benefit requirements outlined in the Health Insurance Premium Subsidy Programs section), except as exemptions apply (see above);
  • Automatic enrollment through the tax system – based on tax filings, individuals would be enrolled in an insurance program;
  • Automatic enrollment through other income tested programs – individuals would be identified and enrolled in an insurance program based on participation in various publicly funded programs such as food stamps and other social services programs;
  • Automatic enrollment through the school system – all school-aged children and their parents would be enrolled if the parents or responsible adults could not show proof of insurance coverage; and
  • Combined approach – automatic enrollment would occur through all three mechanisms described above.

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