Newly Insured Californians Would Fall by More than 1 Million under the Affordable Care Act without the Requirement to Purchase Insurance

The Affordable Care Act (ACA) requirement that almost all Americans purchase some type of health insurance coverage has been controversial. This policy note examines the potential implications of eliminating the minimum coverage requirement (MCR), or "individual mandate." Based on analyses using the California Simulation of Insurance Markets (CalSIM) model, the authors find that the ACA will reduce California’s eligible uninsured population from 4.63 to 2.72 million by 2019; a reduction of 1.91 million or 41% of the eligible uninsured. In contrast, without the MCR, the ACA will reduce the state’s eligible uninsured population from 4.63 to 3.76 million; a reduction of only 870,000 or 19% of the eligible uninsured. Comparing the number of newly insured with and without the MCR shows that the number of newly insured will be 1.04 million lower in 2019 without the MCR. In addition, eliminating the MCR is likely to accelerate premium growth due to adverse selection. If this occurs, the ACA will reduce the state’s eligible uninsured from 4.63 to 4.02 million by 2019; a reduction of only 610,000 or 13% of the eligible uninsured. The number of newly insured will be 1.30 million lower in 2019 without the MCR and with higher premiums due to adverse selection. Eliminating the MCR from the ACA would therefore substantially lower the number of newly insured Californians by 2019 and undermine the goal of the law to substantially increase health insurance coverage for the uninsured