What happens to ObamaCare if the individual mandate is delayed?

Jon Terbush
The Week
Obama could soon face a tough choice on his signature health care law.

ObamaCare's health exchange website face-planted out of the gate this month, with problems so extensive they could take weeks, if not longer, to fix.

With the website effectively inoperable, millions of uninsured Americans are finding it hard to obtain coverage, which they will need to have by March 31, 2014, to avoid paying the individual mandate's penalty. Given that dilemma, Republicans — with the aid of squishy swing-state Democrats — have suggested punting the penalty for one year to give people more time to enroll.

Such a move would be the biggest in a string of embarrassments for the Obama administration, which has already delayed other pieces of the controversial law. Yet how it would impact the law's underlying goal — to extend affordable coverage to millions of Americans — is far less certain.

To be sure, people can still enroll in insurance plans through the health care exchanges — just not through the federally operated website. And in states that opted to build their own portals, the process has gone much more smoothly. These state-run marketplaces "are proof that the online system can work and, for the many people living in those states, are working already," wrote The New Republic's Jonathan Cohn.

"That's a whole lot of people for whom ObamaCare is doing what it's supposed to do," he added.

While people in those states should have little trouble meeting the individual mandate deadline, people in the states without their own exchanges — where GOP-run governments refused to facilitate the law's rollout — don't have such a luxury. It's those states where the administration could consider unilaterally delaying the individual mandate while it irons out the wrinkles in the federal exchange website.

However, doing so could undercut the health care law's main objective.

The individual mandate is supposed to flood the insurance market with millions of new customers and thus drive down premiums for everyone, with healthier adults offsetting the costs of covering sicker, older enrollees. Removing the prodding stick of the mandate could have the effect of convincing healthy individuals to stay uninsured.

If that did indeed happen, "more sick people would flood the system," wrote the Washington Post's Sarah Kliff, which "in turn, would likely lead to higher premiums next year in those states." In that way, "delaying the individual mandate only in states with glitchy Web sites could, in a weird way, make the federal health-care coverage there a whole lot worse."

A CBO report in September estimated that a one-year delay of the individual mandate would result in 11 million fewer Americans gaining coverage next year. While that alone would probably not be enough to trigger a "death spiral" in the insurance market, it would at least serve to reinforce Republicans' warnings that the ObamaCare will result in higher health care costs.

That strikes at another problem for the administration in delaying the mandate: It would be terrible optics.

Democrats refused to consider a Republican proposal to delay the mandate in exchange for funding the government in the recent shutdown fiasco. If they were to suddenly reverse course, they would "end up enacting a policy they vehemently fought and opposed during the shutdown," wrote National Review's Jim Geraghty, one that arose "as a result of their own incompetence."

Support for ObamaCare is actually on the rise, and could continue to go up as the law takes hold. Another embarrassing blow, however, could reverse that trend.

Given those pitfalls, leading Democrats have endorsed a gentler tweak that would extend the enrollment period for Americans to apply for coverage. Now, the uninsured must enroll by about February 15 to have their coverage in place in time to avoid the penalty. But the administration could widen the enrollment window, effectively waiving penalties for those who at least apply for coverage all the way up to the March 31 cutoff.

As another option, the White House could delay the mandate for only a few weeks — something it is reportedly now considering as well.

All of this could become moot if the administration simply gets the ObamaCare website up and running smoothly. A failure to do so, however, could cripple the health care law in the immediate future, keeping millions from obtaining coverage — and handing the GOP a new weapon to continue hacking at the law's foundation.

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