Individual Mandate

February 15, 2011 in Affordable Health Insurance, Employer Sponsored Plans, Grandfathered Health Plans, Group Health Plans, Health Care, Health Care Costs, Health Insurance Exchange, Health Insurance Reform, Individual Health Insurance

Individual Mandate

By Ashley Ahle
February 15, 2011

Most of the hubub about the individual mandate of the Patient Protection and Affordable Care Act has to do with it’s unconstitutionality. Before deciding whether or not it is, it is important to know exactly what the mandate is and how it is meant to help consumers.

In layman’s terms, the individual mandate requires all individuals for whom the minimum coverage allowed will not cost more than eight percent of their monthly wages, and who are not below the poverty line, to purchase minimally comprehensive coverage. People who can’t afford this and do not fall above the poverty line, will have government subsidies available which will virtually pay for all of their coverage.

For people who are already covered or have employee benefits, there will be no effect on them. They are already covered by a government accepted plan and no penalty will affect them. The mandate will go unnoticed. For people who are penalized this is how it will work; The fine will be either $695 per year, or 2.5% of their income, whichever is higher. And if it is not paid, you will not be arrested or sent to jail. As of now the enforcements of the penalty are so small that they may not even be enacted.

So why have the mandate? Because with out it the insurance companies and market itself will fail. No longer allowing companies to discriminate against pre-existing conditions allows people to forgo purchasing coverage until they are critically ill. Flooding the market will sick people will only drive up premium costs and the plans would become too expensive for most. By forcing healthy people to be covered, the idea is they will help to average out insurance costs.

Without a mandate, health care reform would not last and we are too far into the game at this point to take it out of the PPACA.

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