Sabotage judo: States can turn individual mandate repeal to their advantage

With repeal of the ACA's individual mandate apparently imminent, health law scholar Nicholas Bagley urges states to mitigate the damage by...getting their own damn mandate:

Adopting mandates at the state level would help stabilize insurance markets, thereby keeping premiums in check and forestalling coverage losses. It would also provide a welcome source of revenue: Some people will still prefer to pay a penalty than buy insurance. Plus, the states don’t need to stick with the precise terms of the federal mandate, which has been reviled (from different quarters) both for heavy-handedness and its ineffectuality. Stiffer state-level penalties would still be unpopular, but at least they’d work better.

I'd like to suggest that states take this a step further. Why not use the revenue collected from the state mandate to partially fund a reinsurance program?  Reinsurance has repeatedly proven  to sharply reduce premiums  (leading Susan Collins to propose an underfunded federal program to offset the effects of mandate repeal).

CBO projects that mandate repeal will cost the federal government $5 billion per year in forgone penalty payments by 2020 and $6 billion per year by 2025 (while saving the government more than 10 times as much in premium subsidies). States can capture that revenue for themselves by implementing their own mandates. California, with 12% of the nation's population, might collect $600 million per year in 2020 (to the extent that mandate revenue is proportionate to population). New York, with 6% of the population, might pull in $300 million. Jersey might manage $135 million; Minnesota, $85 million. These are crude calculations, but they give some idea of scope.

Who'll go to the mat for the individual mandate?

I fear that the trio of Republican senators who killed "skinny repeal" in late July (Collins, Murkowski, McCain) are going to have a hard time rejecting the tax cut bill in the name of the individual mandate.

Skinny repeal was linked to a (somewhat uncertain) presumption that the bill would be merged in conference with the House bill, which included repeal of enhanced federal funding for the Medicaid expansion and imposition of per-capita caps on federal Medicaid spending. Defense of Medicaid was the heart and soul of the Resistance, as it should have been.

Now, we may well get a partial birth abortion of the ACA - - mandate now, massive cuts to Medicaid (including expansion repeal) later. As Andy Slavitt has warned, that splits the "23 million uninsured" baby.

The individual mandate has always been unpopular -- and frankly, after years of both self-inflicted wounds and sabotage of the ACA marketplace, it has cause to be.  Health economists say that the mandate penalty was too small and too lightly enforced to be fully effective. The counterpoint is that a stricter mandate requires stronger subsidies - e.g., a cap on insurance premiums as a percent of income for all buyers, perhaps one that that matches the "affordability" threshold (currently 9.56% of income for employer-sponsored insurance and 8.05% of income for an ACA-compliant bronze plan).

For many who don't qualify for marketplace subsidies but must look to the individual market for coverage, the mandate is already effectively dead - -and so is the market.  To cite just a couple of cases I've had cause to look up lately: