Starting in 2014, the Affordable Care Act (ACA) requires health plans to cover everyone, including those with pre-existing conditions, and does not allow premiums to vary based on a person’s health status. Without requiring everyone to purchase and maintain coverage, there is a powerful incentive for people to wait and purchase insurance only after they get sick or injured.
In the 1990s, eight states tried implementing insurance market reforms without covering everyone and it failed. Premiums increased dramatically, consumers and employers had fewer coverage choices, and the number of uninsured increased. Policymakers in these states, including Kentucky and Washington, amended or repealed these laws because of the significant negative impact on consumers.
There is broad agreement that requiring health plans to cover everyone, including those with pre-existing conditions, cannot work without an individual mandate. By requiring all Americans to obtain health coverage, the risk pool becomes large enough to account for the sickest Americans, without the adverse effect of skyrocketing premiums.