RAND Corp. analysts who looked at the likely effects eliminating the Act’s mandate determined that the likely result would be an increase in premiums and a reduction in enrollments by individuals.
Using a sophisticated model based on economic theory, the researchers looked at the likely effects eliminating the law’s and tinkering with other provisions the law, to see how they would affect the propensity young adults to buy .
The ’s and subsidies a “carrot” to encourage by young and healthy individuals who might otherwise remain , the researchers noted, while the mandate acts as a “stick” by penalizing those who do not enroll.
The authors the study found that “eliminating the 's and eliminating the mandate both increase premiums and reduce the market.” In addition, “these key features the help to protect against adverse selection and stabilize the market by encouraging healthy people to enroll.”
They also found that premiums in the market “are only modestly sensitive to young adults' propensity to enroll in ,” and that the market would be stable regardless the share enrollees made up by young adults.