Expanding Enrollment Without the Individual Mandate: Options to Bring More People into the Individual Market

Recent changes to the Affordable Care Act, including elimination of the individual mandate penalty, the halting of federal payments for cost-sharing reductions, and expanded access to short-term plans, may reduce enrollment in the individual market.

Analyze options to increase enrollment, accounting for recent policy changes.

RAND’s COMPARE microsimulation model is used to analyze six policies that would expand access to tax credits, increase their generosity, and fund a reinsurance program.

The options would increase individual market enrollment by 400,000 to 3.2 million in 2020. Net increases in total enrollment (300,000 to 2.4 million) are smaller because of offsetting decreases in employer-sponsored insurance. The largest gains are possible through two options: large-scale investment in reinsurance, and extension of tax credits to higher-income people combined with increases in the generosity of existing tax credits. If funded through a fee on health plans, reinsurance could be implemented without increasing the federal deficit. Additional taxpayer costs would increase by $1 billion to $23 billion, depending on the policy. While enhanced tax credits for young adults would lead to small coverage gains, they would entail the lowest costs to taxpayers among the six options.