The addition of a provision to repeal the Affordable Care Act’s (ACA’s) so-called “individual mandate” has blurred the lines between tax reform and health care reform.
The individual mandate was created to nudge Americans to obtain health insurance or face a financial penalty. The mandate is a tax, as confirmed by the Supreme Court in 2012, and is managed by the Internal Revenue Service (IRS).
The policy has long been one of the more vilified components of the ACA, and polling has consistently shown that it is one of the law’s least popular elements. Some have also argued that the individual mandate has been largely ineffective due to weak enforcement and administrative challenges.
Whether or not the individual mandate has been successful, the intent is important. The health and survival of the insurance market depends largely on the participation of young, healthy individuals – people who often have little incentive or inclination to purchase coverage.
Republicans in both the House and Senate tacitly acknowledged this in their health care reform proposals earlier this year by including a concept known as “continuous coverage” which would encourage people to become and remain insured by charging a higher premium if they let their coverage lapse.
Another idea that floated around the Senate was implementing auto-enrollment, which, as its name suggests, would automatically enroll uninsured Americans in a catastrophic coverage plan. People would have the ability to opt-out, so the “freedom” that Republicans often reference in this discussion would be maintained.
The aim of both of these policies is to encourage more people to obtain health care coverage without using a federal tax to do so. Would it work? The health care community is mixed on that (shocker!).
But as the Senate barrels towards passage of its tax reform package – repeal of the individual mandate included – there has been little to no mention of replacing it with an alternative policy.
Should the individual mandate be repealed, the Congressional Budget Office (CBO) estimates that it would significantly increase premiums and as many as 13 million people would lose insurance over the next ten years.
The individual mandate has become largely synonymous with the Affordable Care Act. So, its repeal could be, politically and practically, a mortal blow to the law.
Will an alternative policy be implemented? Only time will tell, but if you have thoughts or if we’ve missed anything, let us know at firstname.lastname@example.org.