Private Health Insurance Coverage:
Expert Views on Approaches to Encourage Voluntary Enrollment
GAO-11-392R, Feb 25, 2011
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To help expand health insurance coverage among the 50 million uninsured Americans, the Patient Protection and Affordable Care Act as amended (PPACA) mandates that individuals, subject to certain exceptions, obtain health insurance coverage or pay a financial penalty beginning in 2014--the "individual mandate". At the same time, PPACA generally requires insurers to accept all applicants, regardless of health status, and prohibits insurers from excluding coverage based on any preexisting conditions. An individual mandate such as PPACA requires has been the subject of continued debate. Many health care policy experts have stressed the importance of a mandate in expanding health care coverage and keeping premiums affordable. For example, experts have noted that such a federal requirement may be necessary to prompt many individuals, such as younger, healthier individuals, to obtain coverage they otherwise would forego--particularly once they are guaranteed access to that coverage later when they may need it. They suggest that bringing these younger, healthier individuals into the insurance market is necessary to avoid adverse selection, whereby disproportionately less healthy individuals who need health care services enroll in coverage, leading to higher premiums that further discourage healthy individuals from enrolling. Some experts have argued that the individual mandate does not go far enough to ensure that all of the uninsured enroll, and that to do so would require heavier penalties that are fully enforced to be truly effective. Other experts suggest that, rather than requiring individuals to obtain health insurance coverage, a more appropriate role for the federal government would be to consider alternatives to encourage voluntary enrollment. Some of these experts also question the legality of a federal mandate. Since its enactment, the federal mandate has been subject to a number of court challenges to its constitutionality. Because of the possibility that legislative or judicial action could result in a change to, or elimination of, the mandate, you asked us to identify potential alternatives to encourage, rather than require individuals to obtain private health insurance coverage. For this report, we obtained the views of multiple experts on the range of approaches Congress could consider to encourage voluntary enrollment in private health insurance coverage.
The experts we interviewed discussed several specific approaches to encourage voluntary health insurance enrollment during our interviews. The approaches are summarized below, generally presented in the order of frequency with which they were proposed by the experts for consideration. These approaches are not endorsed by GAO, nor necessarily by any particular experts we interviewed, or the organizations they represent. (1) Modify open enrollment periods and impose late enrollment penalties. (2) Expand employers' roles in autoenrolling and facilitating employees' health insurance enrollment. (3) Conduct a public education and outreach campaign. (4) Provide broad access to personalized assistance for health coverage enrollment. (5) Impose a tax to pay for uncompensated care. (6) Allow greater variation in premium rates based on enrollee age. (7) Condition the receipt of certain government services upon proof of health insurance coverage. (8) Use health insurance agents and brokers differently. (9) Require or encourage credit rating agencies to use health insurance status as a factor in determining credit ratings. In discussing these approaches, four key themes emerged. First, experts emphasized that most people would prefer to purchase health insurance coverage; however, to the extent that high cost is a barrier, the use of financial incentives is key. Second, they stated that regardless of the particular approach taken to increase voluntary enrollment in the absence of an individual mandate, the availability of affordable, high-quality health care plans with a basic set of benefits, and full coverage of preventive care services is essential to encouraging voluntary enrollment in the coverage. Third, experts said that strong marketing and public education from trusted, community-based sources informing people about their health care choices, their costs, and the consequences of not enrolling in a timely manner are important. And fourth, they said convenient access to the health insurance system through multiple access points staffed by knowledgeable individuals would further facilitate enrollment. Experts expressed important cautions in interpreting their comments on these approaches. Not all the experts concurred that any particular approach merited consideration, and those who proposed an approach for consideration did not necessarily suggest its impact would be significant or comparable to that of an individual mandate. Experts noted that various approaches would have different impacts on encouraging voluntary enrollment, and that a combination of multiple approaches holds more potential to encourage voluntary enrollment than any single approach. For example, a marketing and public education campaign may be combined with other approaches, and would be important to the successful implementation of any effort to encourage enrollment in health insurance. Furthermore, they emphasized that independent research is required to fully evaluate the potential effectiveness and legal or other implications associated with any approach or combination of approaches.