American Academy of Actuaries Underscores Position: Severing Individual Mandate from Market Reforms Will Lead to Adverse Selection

March 27, 2012

WASHINGTON (March 27, 2012) – The American Academy of Actuaries today  reiterated its position on the issue of severability stated in its amicus curiae filing as the U.S. Supreme Court prepares to hear oral arguments on whether, in the Patient Protection and Affordable Care Act (PPACA), the guaranteed-issue and community-rating provisions can be severed from the Act’s individual mandate.

In its January 27 amicus brief, the Academy informed the Court that, “However the Court rules on the constitutionality of the individual-mandate provision … the guaranteed-issue and community-rating provisions should stand or fall together with it.”  This judgment stems from the fundamental actuarial perspective that, “… in order for the community-rating and guaranteed-issue provisions in the Act to operate as intended, they must be paired with an effective mechanism to ensure broad participation in the health-insurance market, such as an individual mandate.”

During consideration of the health reform legislation, the Academy urged Congress and the administration to include, along with any market reforms, mechanisms that would ensure enrollee participation. From an actuarial perspective, for insurance markets to be viable, they must attract a broad cross-section of risks.

See the Academy’s amicus brief:

The American Academy of Actuaries is a nonpartisan professional association that represents actuaries in the United States on public policy issues. The Academy is not taking a position on the law itself, on the constitutionality of the mandate, or if the mandate is severable from any provisions in the law other than those related to guaranteed-issue and community-rating.  


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The American Academy of Actuaries is a 17,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.