As Congress Moves To Remove Individual Mandate, States Seek Their Own Version
It was a decade ago when Massachusetts implemented its own individual mandate that required state residents to obtain health insurance or face financial ramifications. Nationwide, that rule became the framework of the Affordable Care Act (ACA) in 2010. U.S. citizens were required to either receive healthcare from their employer, purchase health insurance through government exchanges, such as Healthcare.gov, or obtain insurance through a government program like Medicaid in order to avoid tax penalties.
As part of the plans of Republican members of Congress and President Trump to dismantle the ACA, the elimination of the individual mandate perhaps was their most pointed mission. That will be accomplished starting in 2019, when new tax reform legislation eliminates the individual mandate provision of the ACA by removing any tax penalty.
However, that does not impact Massachusetts because it has its own state mandate that residents must have health insurance. Indeed, the U.S. Census Bureau reports that 2.5% of Massachusetts state residents were uninsured, making it the state with the lowest number of uninsured in the U.S. The national average for uninsured Americans was 8.6%.
Other states are paying attention. Some are actively considering instituting some form of a state individual mandate where residents must stay insured in an effort to manage premium costs within their state exchanges and keep insurers interested in offering health insurance plans to state residents.
California is considering implementing auto-enrollment through its healthcare exchange, Covered California, should the removal of the federal individual mandate go into effect. Maryland established a commission to review its own options for a statewide individual mandate, including enrolling for healthcare through their tax returns. Even the local government in Washington, D.C., is discussing how to retain an individual mandate.
States bringing their own adaptations of the individual mandate could create complexities to an already complex system. Health insurance companies would find themselves facing different requirements from state to state, which was the advantage of dealing with one federal law. Employers with multi-state locations would potentially have divergent federal and state requirements that would create a new level of state regulation to consider.
The willingness of some states to pursue their own individual mandates as Congress plans to remove the ACA’s carries a message. While the Trump administration works to find more and more ways to repeal or undermine the Affordable Care Act, which will effectively make insurance more expensive for some Americans, some states are looking to find ways to provide more affordable insurance options that maintain the protections afforded by the ACA.
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