The Columbus Dispatch borrowed from a Wall Street Journal editorial to forward the unproven assumption that the Obama administration delayed the employer mandate in an effort to prop up the Affordable Care Act's (ACA) individual market. But evidence shows the market was considered stable prior to this delay.
In a February 21 editorial, the Dispatch, which is no fan of the ACA, cast the Obama administration's decision to delay the employer mandate -- which, when enacted, will force companies with more than 50 full-time employees to provide subsidized health insurance -- until 2016 as a bid to save the law from failing and “to shore up the fiscal underpinnings of the health-care exchanges,” a theory it pulled from a Wall Street Journal editorial that advocated for the repeal of the health care law:
And what's behind this latest change? Many immediately saw it as another move to protect Democratic lawmakers who are up for re-election in November from the fallout of the health-care mess.
The Wall Street Journal last week offered another reason for the delay: to shore up the fiscal underpinnings of the health-care exchanges. The Journal points out that “people are supposed to be eligible for subsidies (to buy insurance on the exchanges) only if their employers don't offer insurance. Since the White House is releasing many more businesses from the mandate's obligations, many more people will suddenly qualify to join the exchanges.”
This would improve the demographic balance needed to ensure that the health-care law is fiscally sound, because the law relies on charging healthy people more for health insurance in order to subsidize the costs of those who are sicker.
However, experts considered the insurance market stable at least a month before the Obama administration issued the delay. As The Washington Post's Wonkblog noted on January 14, the risk of a “death spiral” was over:
The risk of a “death spiral” is over. The Kaiser Family Foundation estimates that if the market's age distribution freezes at its current level -- an extremely unlikely scenario -- “overall costs in individual market plans would be about 2.4% higher than premium revenues.” So, in theory, premiums costs might rise by a few percentage points. That's a problem, but it's nothing even in the neighborhood of a death spiral.
Even insurance companies, who have much to lose if the law fails, aren't worried about the demographics of the marketplace. As Aetna's chief executive Mark Bertolini told a health care panel in mid-January in reference to the numbers: “I'm not alarmed.” He added: “They're better than I thought they would have been.”
In addition, relaxing the mandate wouldn't necessarily create a windfall of sign-ups on the individual market. As the Small Business Majority explained in a press release discussing a previous delay in July 2013, 96 percent of businesses in America have fewer than 50 employees, and of the 4 percent that have more than 50 workers, 96 percent already offer insurance and would presumably continue to do so. That leaves workers from about 4 percent of firms with more than 50 employees eligible to sign up on the individual market -- not something that would dramatically shift the demographics in any meaningful way.