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Photo: Samuel Corum/Anadolu Agency/Getty Images

The Affordable Care Act’s insurance market has not been materially affected by the elimination of the individual mandate penalty — undercutting a key argument in the lawsuit urging the courts to strike down the health care law.

The big picture: Healthy enrollees have not left the market in droves, premiums have not spiked and there has been no market death spiral.

Details: Premiums spiked in earlier years, as insurers figured out the market and anticipated the elimination of the penalty, but are declining by an average of 2-3% in 2020.

  • Healthy people do not appear to have fled the market. ACA enrollees spent fewer days in the hospital in 2019 than in the previous four years.
  • The financial health of insurers participating in the ACA marketplaces is stable, and dramatically improved since the early years of the ACA. 
  • Other elements of the ACA, such as the Medicaid expansion, appear to have been largely unaffected by the elimination of the penalty.

Flashback: ACA historians will remember that many critics of the mandate believed the penalty was too weak to drive the healthy into the marketplaces from the start.

  • And real-world experience has shown that premium subsidies have been more important than the mandate penalty.

There are still well-documented problems in the individual market. 

  • Policies are unaffordable for many people who do not receive subsidies. Deductibles are very high (averaging $4,544 per person for a “benchmark” plan).
  • And insurer participation in some rural areas remains fragile.    

But these problems existed with the mandate penalty in effect.  

  • Experience on the ground has demonstrated that the marketplaces and the larger ACA continue to function, even when “severed” from the mandate penalty.

Go deeper

Updated 39 mins ago - Health

U.K. first nation to clear Pfizer coronavirus vaccine for mass rollout

A health care worker during the phase 3 COVID-19 vaccine trial by the Pfizer and BioNTech in Ankara, Turkey, in October. Photo: Dogukan Keskinkilic/Anadolu Agency via Getty Images

The United Kingdom's government announced Wednesday it's approved Pfizer-BioNTech's COVID-19 vaccine, which "will be made available across the U.K. from next week."

Why it matters: The U.K. has beaten the U.S. to become the first Western country to give emergency approval for a vaccine found to be 95% effective with no serious side effects against a virus that's killed nearly 1.5 million people globally.

1 hour ago - World

NYT: Biden won't immediately remove U.S. tariffs on China

President-elect Joe Biden during an event in Wilmington, Delaware, on Tuesday. Photo: Alex Wong/Getty Images

President Trump's 25% tariffs imposed on China under the phase one trade deal will remain in place at the start of the new administration, President-elect Biden said in an interview with the New York Times published early Wednesday.

Details: "I'm not going to make any immediate moves, and the same applies to the tariffs," Biden said. He plans to conduct a full review of the current U.S. policy on China and speak with key allies in Asia and Europe to "develop a coherent strategy," he said.

Trump threatens to veto Defense spending bill over social media shield

Photo: Erin Schaff - Pool/Getty Images

President Trump tweeted Tuesday a threat to veto a must-pass end-of-year $740 billion bill defense-spending authorization bill unless Congress repeals a federal law that protects social media sites from legal liability.

Why it matters: Trump's attempt to get Congress to end the tech industry protections under Section 230 of the Communications Decency Act is the latest escalation in his war on tech giants over what he and some other Republicans perceive as bias against conservatives.

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