ADEA State Update

Legislatures Discuss Creating a State Individual Mandate

(State Policy, Insurance, Medicare and Medicaid, ACA) Permanent link   All Posts

HealthSignAlthough the individual mandate within the Affordable Care Act (ACA) was repealed as part of the tax reform bill recently signed into law by President Trump, at least nine states are taking the issue into their own hands. State lawmakers in California, Connecticut, Hawaii, Maryland, Minnesota, New Jersey, Rhode Island, Vermont and Washington, as well as the District of Columbia, are all considering a law to require residents to buy health insurance. 

The proposals to impose health coverage mandates in some states mark a shift of authority over health care from the federal government to the states, possibly leading to significant coverage differences between red states and blue states.

In the District of Columbia, for example, the proposal is much like the federal ACA individual mandate. The amount of the penalty would be 2.5% of family income, or $695 per adult (plus $347.50 per child), whichever is greater, adjusted for inflation each year. The penalty would not be unlimited, with the District maintaining caps on the penalty linked to the average premium for a bronze plan in the District. The District would also largely maintain federal exemptions to the individual mandate for those who qualify based on, for instance, religious exemptions, income or going without health insurance for three months or less.

On March 8, the Joint Committee on Insurance and Real Estate, within the Connecticut General Assembly, held a public hearing on H.B. 5379. The proposed bill would require any taxpayer who fails to maintain health insurance coverage to pay a state individual health care responsibility fee. The fee, or penalty, for not buying health insurance would be the same cost as enrolling in a plan. 

A competing bill, Governor’s Bill 5039, was heard in committee on March 8. The proposed bill would require a state individual mandate with a lower fee/penalty than the federal government has historically charged (2% of a person’s income instead of 4% of income). Gov. Dannel P. Malloy (D-CT) submitted written testimony to the General Assembly’s Insurance and Real Estate Committee in support of his proposal. In his testimony, the Governor told legislators that “The Affordable Care Act made health care more economical and accessible for millions of Americans by acknowledging that health care is a basic human right that should never be out of reach for anyone. This proposal seeks to ensure the most vital aspects of the ACA remain protected in Connecticut.”

The ACA’s individual mandate was implemented to keep premiums low by requiring everyone to have insurance. Supporters of the mandate say that, without it, healthy people are less inclined to buy insurance, causing premiums to rise for those who need it the most. Others argue that individuals should not be forced to buy health coverage.

ADEA staff will keep you abreast of state-level activity related to this issue as policy discussions continue.

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