The feature of Obamacare that is least liked by the public is the individual mandate. Under current law, people are required to have health insurance. If they don’t, they can be fined. For example, if you are not insured by an employer plan or a government program (such a Medicaid) you are legally required to buy insurance in the individual market. The type of insurance that is sold there is highly regulated and it probably costs twice as much as it should – or more.
Both the New York Times and the Washington Post ran articles last Friday on how unattractive these policies are in some parts of the country. In Charlottesville, Virginia, for example, a family of four can pay $30,000 a year for coverage with a $14,400 deductible. That’s more than the family pays for its mortgage for insurance coverage that may not pay a single medical bill.
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The Affordable Care Act (ACA) set substantial new federal requirements for health insurance plans and the insurers that provide them. These requirements significantly altered the way insurance is regulated, which was traditionally left to the states. The ACA included in Section 1332 the option for states to apply for a waiver from many of these regulations. However, the myriad stipulations tied to these 1332 State Innovation Waivers limit states’ ability to regain control of their own insurance regulations. Further, states have no guarantee they will be granted a waiver, even if they meet all of the ACA’s requirements for obtaining one.
In response to these issues, two Senate committees have introduced (or at least drafted) legislation that would solve many of the problems that states have had obtaining 1332 waivers. In addition to easing some standards and shortening timeframes for decisions, the bills also provide a standard path for states to gain these waivers in certain circumstances.
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A headline this week in The Hill shocked me: “ObamaCare enrollment strong in third week of sign-ups.” The Hill is a serious, well-respected, non-partisan news source. But any reader taking this headline at face value would be seriously misled about what is really going on with Obamacare enrollments during this fifth open enrollment season.
The Hill’s reporter correctly notes that “the pace of sign-ups has exceeded last year: In the first 26 days of last year’s open enrollment period, 2.1 million people signed up compared to the 2.3 million people who signed up the first 18 days of this year’s period.”
Those figures imply that the daily rate of sign-ups this year is outpacing last year’s rate by 58% [originally reported as 28%: Update #2]. Surely that is evidence of strong enrollment, no?
The reason it is not is buried at the tail-end of the story where the reporter notes “the enrollment period ends Dec. 15, which is about half as much time as people had to sign up last year.”
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The Senate Finance Committee announced today that it would add to the Senate tax reform bill a zeroing out of Obamacare’s individual mandate surtax, in essence repealing the mandate. This is a big tax cut aimed squarely at America’s middle class.
The mandate is a tax which punishes those who can least afford it
Obamacare’s individual mandate is enforced by the collection of a surtax on income. Failure to purchase Obamacare insurance triggers the surtax.
In 2017, the surtax is equal to the greater of:
- 2.5 percent of adjusted gross income, or
- the dollar penalty
The dollar penalty is $695 for every adult in the household, plus $347.50 for every child in the household, with a household maximum of $2085.
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Repealing Obamacare’s individual mandate might not be the devastating blow to health insurance markets that supporters of the law fear.
Because the tax penalty for not having insurance is far less costly than what many Americans would have to pay for coverage, many have chosen to take the fine. Eliminating it, therefore, might not radically change behavior — or fulfill the dire predictions of spiking premiums and vast increases in uninsured people that economists, health providers and politicians once predicted.
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This month marks the start of the ACA’s fifth open enrollment period for individuals who purchase health plans on their own. The November Kaiser Health Tracking Poll finds three in ten of the public saying they haven’t heard anything at all about the current open enrollment period. Three in ten Americans say they have heard “a little” while four in ten say they have heard either “some” (21 percent) or “a lot” (18 percent). About half of the public (45 percent) say they have heard less about open enrollment this year compared to previous years while four in ten (38 percent) say they have heard “about the same amount.
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Consumers here at first did not believe the health insurance premiums they saw when they went shopping for coverage this month on HealthCare.gov. Only five plans were available, and for a family of four with parents in their mid-30s, the cheapest plan went typically for more than $2,400 a month, nearly $30,000 a year.
With the deadline for a decision less than a month away, consumers are desperately weighing their options, dismayed at the choices they have under the Affordable Care Act and convinced that political forces in Washington are toying with their health and well-being.
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Republicans are right to want to repeal the mandate that fines Americans who don’t buy health insurance. Their dual motive is to repeal the most loathed part of the Affordable Care Act as well as to make tax reform comply with the Senate Byrd Rule that dictates no deficits outside a 10-year budget window. Some Americans no doubt would decide not to buy insurance if they aren’t hit with a tax, but that would be their choice. Republicans aren’t denying them anything. No other ObamaCare rule or mandate would be changed, and no benefit formula would be altered. Anyone who still wants an ObamaCare policy could still buy it.
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As Republicans and the Trump administration continue trying to chip away at the Affordable Care Act, the Internal Revenue Service has begun, for the first time, to enforce one of the law’s most polarizing provisions: the employer mandate.
Thousands of businesses — many of them small or midsize — will soon receive a letter saying that they owe the government money because they failed to offer their workers qualifying health insurance. The first round of notices, which the I.R.S. began sending late last month, are being mailed to companies that have at least 100 full-time employees and ran afoul of the law in 2015, the year that the mandate took effect.
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Senate Republicans have added the repeal of Obamacare’s individual mandate to the latest version of their tax bill, with several key swing votes saying they’re open to the idea.
Late on Tuesday, the chairman of the Senate Finance Committee, Orrin Hatch of Utah, released a new bill that would eliminate the mandate’s fines beginning in 2019. The addition was discussed at a closed-door party lunch meeting earlier in the day, and several Republican senators said no one spoke out publicly against repealing the mandate.
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