States Consider Individual Mandates in Place of Federal Individual Mandate

February 2018 ~

Nine states and the District of Columbia have announced they are considering laws that would require residents to purchase health insurance.

Connecticut, Rhode Island, New Jersey, and Vermont, are amongst the states considering the state mandates to replace the recently repealed federal individual mandate. Lawmakers in Maryland, California, Hawaii, Minnesota, Washington, and the District of Columbia, are also considering similar proposals requiring residents to buy health insurance.

The proposals follow the vote to repeal the Affordable Care Act’s (ACA) mandate that required individuals to have health insurance. The ACA mandate was implemented in an effort to help keep premiums low by requiring everyone to have insurance and required most Americans to obtain ACA-compliant health coverage or face tax penalties so that more healthy people would have insurance and balance the costs associated with individuals who are ill. The ACA’s individual mandate was effectively repealed by federal tax legislation finalized last December and will reduce the penalty to zero starting in 2019.

According to a report from the Congressional Budget Office (CBO), repeal of the individual mandate alone will result in millions of people dropping or losing coverage. The CBO estimates approximately 13 million fewer people will buy insurance by 2027, resulting in higher insurance rates for those who do purchase coverage as well as an increase in marketplace premiums of 10% for most years. The report also states that it is possible that more insurers could remain on the exchanges in states that have a mandate, since that could provide a more predictable mix of both healthy and ill customers.

The states implementing and those considering individual mandates hope to fill the coverage gaps to ensure residents have healthcare coverage, stabilize the market, and control health care costs.

Source(s): The Wall Street Journal; The Hill; Benefits Pro; Clark;