By CHRISTINE EIBNER PhD, SARAH NOWAK PhD, MS, PREETHI RAO PhD
Although signed into law in 2010, the Affordable Care Act has been in constant flux, with key aspects changing due to time-dependent provisions, Supreme Court decisions and shifts in U.S. policy. The effects of changes to the ACA on health insurance enrollment and premiums often depend on state regulatory decisions and other state-specific factors. The elimination of the individual mandate penalty is a prime example of this when applied to New York state, which has unusual rules in its individual insurance market.
In 2019, consumers will no longer face financial penalties stemming from the ACA’s individual mandate, which requires most people to secure health insurance. Without pressure from the individual mandate to enroll, younger and healthier people might drop coverage, leading to premium increases. New York’s health insurance regulations and expansive safety-net programs could make the state’s insurance market particularly susceptible to premium increases after the penalty’s elimination.
New York uses what is known as “full community rating” in its individual health insurance market, which means that all adult enrollees, regardless of age or whether they use tobacco, are charged the same premium. In most states, the youngest adults in the market pay one-third of what older adults do, and tobacco users are charged 1.5 times as much as non-users. New York’s flat premium structure raises costs for younger enrollees and nonsmokers, making them more likely drop coverage when the penalty goes away.
