The Effect of Eliminating the Individual Mandate Penalty and the Role of Behavioral Factors

The Affordable Care Act’s individual mandate requires most Americans to enroll in health insurance. In 2017, Congress eliminated financial penalties associated with failing to comply with the mandate, which becomes effective in 2019. Under a range of scenarios that reflect alternative assumptions about responses to these factors, the authors find that enrollment falls by 2.8 million to 13 million people and premiums for bronze plans increase by 3 percent to 13 percent when the mandate penalty is removed. The impact on the federal budget deficit is more uncertain, with effects ranging from a reduction of $8 billion to an increase of $3.6 billion in 2020.


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