The Individual Mandate
Among the most contentious provisions of the Affordable Care Act has been the individual mandate. The ACA’s individual mandate requires that Americans obtain and maintain health insurance or pay a tax penalty. Many contend Congress should not have the authority to make citizens pay the individual mandate. Others say it is ineffective and unnecessary. Despite the many critiques, the individual mandate is a formative aspect of the Affordable Care Act.
The individual mandate is necessary. Uninsured individuals still utilize medical care. Most often, uninsured individuals end up in the emergency room where it is illegal to refuse medical services despite the individual’s ability to pay. In the peer-reviewed journal, Health Affairs, researchers found that “providers’ uncompensated care costs in 2013 are between $74.9 billion and $84.9 billion.” As a direct result, private insurance premiums are rising for insured individuals.
Past attempts at removing individual mandates has proven its necessity to controlling costs in comprehensive health care schemes. The Center for American Progress brings to light past states which have removed the individual mandate and whose cost of health care has risen subsequently. “Five states have tried undertaking nongroup insurance market reforms such as those contemplated in the PPACA without an individual mandate. Those five states are now among the most expensive states in which to buy nongroup insurance.”
The GOP’s American Health Care Act proposal intends to revoke the individual mandate. In doing this, millions of Americans would be stripped of their ability to afford health care. MIT Professor Jonathan Gruber writes, “A post-reform world without a mandate would result in only a small minority of the uninsured gaining coverage, costs in the new exchanges that are 40 percent higher, and government spending that is only about 20 percent lower. This is a terrible trade off that illustrates the enormous value of the mandate as a pillar of reform.”
Instead, the AHCA proposes incentivizing Americans to keep coverage by requiring insurance companies to charge a 30% “premium surcharge” for those who purchase insurance after at least a two-month break in coverage. This is the so-called “continuous coverage” provision of the AHCA. However, voters have already expressed a dislike for this type of penalty and some experts believe it could further discourage healthy adults from buying health insurance.
Vox reports on the continuous coverage provision included in the American Health Care Act, finding that insurance experts are skeptical that it will work and that voters hate the premium surcharge it creates.
With the AHCA set to repeal the ACA’s individual mandate provision, an editorial from Bloomberg explains why the individual mandate is an essential part of healthcare reform, and how it only shifts costs from purchasers of health insurance to taxpayers — either way, we all will pay.
Following passage of the Affordable Care Act, Utah passed legislation prohibiting the requirement for everyone to buy health insurance. The Utah Attorney General then announced the state would join other states in filing a constitutional challenge to the ACA provision.