According to a report by Milliman, Inc., guarantee issue requires insurers to sell an individual health insurance policy without regard to a person's health.
Community rating requires that all consumers pay the same or similar premiums without regard to age, gender or health status. According to the report, these initiatives have the potential to cause individuals to wait until they have health problems to buy insurance.
That scenario could cause premiums to increase for all policyholders, increasing the likelihood that lower-risk individuals leave the market, which could lead to further rate increases. If this continues, the pool or market could essentially collapse or shrink to include only the high-risk population, Milliman said.
"Today's ruling by the 11th Circuit Court that the health insurance mandate is unconstitutional is a significant victory towards striking down a major component of the massively flawed healthcare legislation enacted last year," said Robert Alt, senior legal fellow and deputy director of the Center for Legal and Judicial Studies of the Heritage Foundation.
"This 2-1 decision was non-partisan; it is especially significant that Judge Hull, a Clinton appointee, co-authored the opinion. While it is disappointing that the court did not strike down the whole statute, that is a question that is ultimately best answered by the Supreme Court and there is every indication that that is where this case is headed next term," he said.