The debate surrounding the pending repeal of the Affordable Care Act’s centerpiece requirement that most people get insurance or pay a penalty is alive and well.
A measure to repeal the ACA’s mandate was rolled into the recently proposed tax plan and is currently being vigorously debated.
But now, more experts are concluding that rising premiums next year would exempt many more people from the mandate. The exemption applies if the least-expensive health insurance available costs more than 8.13% of an individual’s income.
The Robert Wood Johnson Foundation, found in a recent study that reports in the 15 most-expensive states, premiums would exceed the affordability threshold for a person with an income of $50,000.
Doug Badger, another health-policy analyst, comments, “Premiums for the ACA policies next year will be so high that millions will be exempt from the tax penalty whether Congress repeals it or not.”
There is concern that health-insurance markets have struggled for years under the ACA because not enough healthy people signed up for coverage even with the mandate. As a result, they say, the ACA already suffers from the problems liberals are warning about.
A spokesperson for the Health and Human Services Secretary commented in late November “Twenty-eight million people are not in that pool, which has eroded the risk pool.”
The Congressional Budget Office projects that 29 million Americans are uninsured. Of these, approximately 6.7 million people paid a penalty of $695 in 2016, or 2.5% of their income for not having coverage.
The remainder of people are exempt from the requirement or the penalty because either their incomes are below the threshold where they must obtain coverage; they are ineligible because of their immigration status; or insurance would cost them more than the proportion of their income specified by law.
Minus mandate incentive, the CBO predicts that 13 million fewer people will have insurance by 2027. This is an assumption, however, and under scrutiny.
Both sides of the debate agree that the mandate is crucial to the smooth functioning of the ACA and making the risk pool stable is vital to keep individual insurance premiums in line with the overall cost to cover a person insured through a larger group or employer.
Source: WSJ – Dec. 10, 2017